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SHAH  COMMISSION  OF  INQUIRY 


(Appointed  under  Section  3  of  the  Commissions  of  Inquiry  Act,  1952) 


INTERIM    REPORT   I 


March  11,  1978 


.    .  -._£ 


#*?!*«  4(J& 


SHAH  COMMISSION  OF  INQUIRY 


(Appointed  under  Section  3  of  the  Commissions  of  Inquiry  Act,  1952) 


INTERIM    REPORT  I 


March  11,  1978 


CONTENTS  . 


Chapter  I 

Chapter  If 

Chapter  III 

Chapter  IV 

Chapter  V 

Chapter  VI 

Chapter  VII 

I. 

2. 

■■    3. 

Pages 

Notification  appointing  a  Commission  of,  Inquiry  and  the  staff  sanctioned,  and  Categorisation  of  Complaints  1—3 

Important  enactments  and  amendments  of  the  Constitution     .'                . 4 — 6 

Procedure  followed  by  the  Commission  explained 7 — 15 

Scheme  of  the  Report •      .  16 

Circumstances  leading  to  the  declaration  of  Emergency  on  June  25,  1975 17—32 

The  working  of  the  media  of  information  under  the  I  &  B  Ministry  during  the  Emergency           .         .         .  33 — 48 
Specific  cases  : 

The  case  regarding  the  reversion  of  Shri  Justice  R.  N.  Aggarwal  of  Delhi  High  Court          ....  49 — 51 

Refusal  by  Smt.  Indira  Gandhi  to  extend  the  term  of  Shri  Justice  U.  R.  Lalit  of  the  Bombay  High  Court     .  51 — 52 

Deviation  from  established  procedure  and  irregularities  in  the  appointment  of  Shri  K.R.  Puri  as  Governor 

of  Reserve  Bank  of  India  ■ . 52—54 

Subversion  of  lawful  processes  and  well-established  conventions  in  the  appointment  of  Shri  T.  R.  Vardachary 

as  Chairman  of  the  State  Bank  of  India 54—57 

Deviation  from  established  procedure  and  irregularities  in  the  appointment  of  Shri  T.  R.  Tuli  as  Chairman  and 

Managing  Director  of  the  Punjab  National  Bank 57 — 58 

Deviation  from  established    procedure    In    public  sector  undertaking  in  the  case  of  Lt.  Genl.  Satarawala's 

appointment  as  Chairman-eHHi-Managing  Director  of  I.T.D.C.         .........  59 


7.     Deviation  from  established  procedure  in  the  appointment  of  Air   Marshal   H,   C.    Dewan   as  Chairman, 

International  Airports  Authority  of  India       ..,.-...,....  59 

S.     Misuse  of  powers  and  institution  of  false  criminal  complaints  against  four  senior  officials  by  the  CBI  at   the 

instance  of  Smt.  Indira  Gandhi 59—64 

9.     Uniawful  detention  of  Textile/Customs  employees  under  MISA  by  Delhi  Administration  and  institution  of 

false  CBI  cases  against  four  of  them      . 64 — 67 

.■  10.     Misuse  of  powers  and  miscarriage  of  justice  in  the  case  of  Shri  Sudarshan  Kumar  Verma  by  the  CBI  officials  68 — 69 

!  1 1 .     Deviation  from  established  procedure  by  Shri  T.  R .  Tuli,  Chairman  of  the  Punjab  National  Bank  in  allowing 

a  clean  overdraft  to  M/s    Associated  Journals  Limited  .,..,...,  69 — 71 

12.  Deviation  from  established  procedure  in  sanctioning  facility  by  way  of  opening  three  foreign  letters  of  credit 

by  the  Punjab  National  Bank  in  favour  of  M/s    ICRS MA  Chemicals  Pvt.  Ltd,  .         .        .  72—73 

13.  Concessions  by  Punjab  National  Bank  in  favoujiiif  Maruti  Limited  .......  73 — 74 

T4.     Deviation  from  established  procedure  in  the  rcconstitution  of  the  Boards  of  Air  India  and  Indian     Airlines 

Corporations      .         .  .  .  .         .         .         .  .  •  -         .  .....  74—75 

15.      Decision  processes  leading  to  the  purchase  of  3  Hoeing  737  Aircraft  by  Indian  Airlines        ....  75—78 

!6.     Detention  of  Smt.  Gayatri  Devi  and  Lt,  Col.  Bhawani  Singn  under  COFEPOSA  Act,  1974         .  .  78—82 

.17.      Detention  of  Shri  Bliini  Sen  Suchar  and  seven  others  ,  .  ,  ...  .         .         .  82 — 86 

IS,      Improprieties  committed  in  regard  to  Shri    Manga!  Behari.  IAS  of  Rajasthan  cadre    and    termination    of 

the  services  or  Smt.  Ciuindrawati  Sharma,  Axstt.  Teacher         .........  86 — 93 

I1).      Search  and  seizure  opera  linns  under  (lie  Income  Tax  At  I  of  Iw-.i  Trade  Union  leaders  ....  93     •)•! 


CHAPTER  J 


In  exercise  of  the  powers  under  Section  3  of  the 
Commissions  of  Inquiry  Act,  1952,  the  Central 
Government  published  on  May  28,  1977,  a  notification 
appointing  a  Commission  of  Inquiry. 

1 .2  The  notification  reads  as  follows  : 

"MINISTRY  OF  HOME  AFFAIRS 
NOTIFICATION 

New  Delhi,  the  28/A  May,   \911 

SO.  374(E). — Whereas  there  is  a  widespread 
demand  from  different  sections  of  the  public 
for  .  an  inquiry  into  several  aspects  of 
allegations  of  abuse  oi  authority,  excesses 
and  malpractices  committed  and  action 
taken  or  purported  to  be  taken  in  the  wake 
of  the  Emergency  proclaimed  on  the 
25th  June,  1975  under  Article  352. of  the 
Constitution; 

And  whereas  the  Central  Government 
is  of  the  opinion  that  it  is  necessary  to 
appoint  a  Commission  of  Inquiry  for  the 
purpose  of  making:  jnquiry  into  a  definite 
matter  .  of  public  importance,  that  is, 
excesses,  malpractices  aiid  misdeeds  during 
the  Emergency  or  in  the  days  immediately 
preceding  the  said  proclamation,  by  the 
political  authorities,  public  servants,  their 
I  '  ,-  friends  and/or  relatives  and  in  particular 
I  allegations    of   gross    misuse    of    powers    of 

arrest  or  detention,  maltreatment,  of  and 
atrocities  on  detenus  and  other  prisoners 
arrested  under  DISiR,  compulsion  and  use 
of  force  in  the  implementation  of  the  family 
planning  programme  and  indiscriminate  and 
high-handdd  demolition  of  houses,  huts, 
shops,  buildings,  structures  and  destruction 
of  property  in  the  name  of  slum  clearance 
or  enforcement  of  town  planning  or  land 
use  schemes  in  the  cities  and  towns  resulting, 
inter  alia,  in  large  number  of  people 
becoming  homeless  or  having  to  move  far 
away  from  the  places  of  their  vocation. 

Now,  therefore,  in  exercise  of  the 
powers  conferred  by  Section  3  of  the 
Commissions  of  Inquiry  Act,  19.52  (60  of 
1952)     the     Central     Government    hereby 

,  appoints  a  Commission  of  Inquiry  consisting 

I  of  ..the  following,  namely, 

Chairman — Shir  J.  C.  Shah,  Retired  Chief 
Justice  of  the  Supreme  Court 
of  India. 


2.  The  terms  of  reference  of  the  Commission  shall 
be  as  follows  : 

(a)  to  inquire  into  the  facts  and  circumstances 
relating  to  specific  instances  of — 

(i)  subversion  of  lawful  processes  and  well- 
established  conventions,  administrative 
procedures  and  practices,  abuse  of 
authority,  misuse  of  powers,  excesses 
and/or  malpractices  committed  during 
the  period  when  the  Proclamation  of 
Emergency  made  on  25th  June,  1975 
under  Article  352  of  the  Constitution  was 
in  force  or  in  days  immediately  preceding 
the  said  Proclamation, 

(iij   misuse  of  powers  of  arrests  or  issue  of 

detention    orders   where   such   arrests   or 

orders  are  alleged  to  have  been  made  on 

3  considerations   not  germane   to   the  pur- 

,  poses    of   the   relevant  Acts   during   the 

aforesaid  period, 

(hi)  specific  instances  of  maltreatment  of  and/ 

.  or   atrocities   on   persons   arrested  under 

DISIR  or  detained  and  their  relatives  and 

close     associates     during     the     aforesaid 

period, 

(iv)   specific  instances  of  compulsion  and  use 

of    force    in   the  implementation    of  the 

family    planning  programme    during  the 
aforesaid  period, 

(v)  indiscriminate,  high-handed  or  unautho- 
rised demolition  of  houses,  huts,  shops, 
buildings,  structures  and  destruction  'Of 
property  in  the  name  of  slum  clearance 
or  enforcement  of  Town  Planning  or  land 
use  schemes,  during  the  aforesaid  period, 

Provided  that  the  inquiry  shall  be  in 
regard  to  acts  of  such  abuse  of  authority, 
misuse  of  powers,  excesses,  malpractices 
etc.  alleged  to  have  been  committed  by 
public  servants,  and 

Provided  further  that  the  inquiry  shall 
also  cover  the  conduct  of  other  individuals 
who  may  have  directed,  instigated  or 
sided  or  abetted  or  otherwise  associated 
themselves  with  the  commission  of  such 
acts  by  public  servants; 

(b)  to  consider  such  other  matters  which,  in 
the  opinion  of  the  Commission,  have  any 
relevance 'to  the  aforesaid  allegations;  and 


(c)  to  recommend  measures'  which  may  be 
adopted  for  preventing  the  recurrence  of 
such  abuse  of  authority,  misuse  of  powers, 
excesses  and  malpractices. 

3,  The   inquiry   by   the    Commission   shall    be   in 
regard  to — 

(i)  complaints  or  allegalions  aforesaid  that  may 
be  made  before  the  Commission  by  any 
individual  or  association  in  such  form  and 
accompanied  by  such  affidavits  as  may  be 
prescribed  by  the  Commission,  and 

(ii)  such  instances  rclatable  to  paragraph  2(a)(i) 
to  (v)  as  may  be  brought  to  its  notice 
by  the  Central  Government-  or  a  State 
Government  or  an  Union  Territory  for 
inquiry. 

4.  The  Commission  shall  make  interim  reports  to 
the  Central  Government  on  the  conclusion  of  inquiry 
into  any  particular  allegation  or  series  of  allegations 
and  will  be  expected  to  complete  its  inquiry  jand 
submit  its  final  report  to  the  Central  Government  on 
or  before  31st  December,  1977. 

5.  The  Central  Government  is  of  opinion  that 
having  regard  to  the  nature  of  the  inquiry  to  be  made 
and  other  circumstances  of  the  case,  all  the  provisions 
of  sub-section  (2),  sub-section  (3),  sub-section  (4), 
and  sub-section  (5)  of  Section  5  of  the  Commissions 
of  Inquiry  Act,  1952  (60  of  1952),  should  be  made 
applicable  to  the  said  Commission  and  the  Central 
Government  hereby  directs  under  sub-section  (1)  of 
the  said  Section  5  that  all  the  provisions  aforesaid  shall 
apply  to  the  said  Commission. 

[No,  II/16011/32/77-S&P(D.lI)] 
T.  C.  A.  SRINIVASAVARDAN,  Secy." 

.1.3  Subsequently,  the  Central  Government  issued 
the  following  notification  extending .  the  time  for  the 
completion  of  the  Inquiry  to  June  30,  1978  : 

"MINISTRY  OF  HOME  AFFAIRS 
NOTIFICATION 

New  Delhi,  the  16th  December,  1977 

S.O.  544(E). — In  exercise  of  the  powers 
conferred  by  Section  3  of  the  Commission 
of  Inquiry  Act,  1952  (60  of  1952),  the 
Central  Government  hereby  makes  the 
following  amendment  in  the  Notification  of 
the  Government  of  India  in  the  Ministry  of 
Home  Affairs  No.  S.O.  374(E),  dated 
28th  May,  1977,  (relating  to  the  Commission 
of  Inquiry  on  excesses  during  emergency) 
namely  :— 

la  para  4  of  the  said  Notification  for  the  words 
and  figures  "on  or  before  31st  December, 
1977"  the  words  and  figures  "on  or 
before  30th  June,  1978"  shall  be 
substituted. 

[No.  11/1801  l/32/77-S&P(D.IIj  Comsec] 
MAHESHWAR  PRASAD,  Addl.  Secy." 


1.4  The  Commission  issued  notices  under  rule 
5(2)  (b)  of  the  Commissions  of  Inquiry  Rules, 
Pursuant  [hereto,  48,500  complaints  were  received  in 
the  office  of  Ihe  Commission. 


1,5  The  Government  of  India  made  Ihe  services  of 
the  following  officers  and  staff  available  to  the 
Commission  for  investigation  of  the  various  complaints 
and  other  cases  which  came  for  scrutiny  before  the 
Commission  : — 


SI.            Designation 
No. 

Numbers      Numbers 
Sanctioned   presently 
working 

CD                       (2) 

(3) 

(4) 

1.  Secretary 

1 

1 

2.  Joint  Secretary 

1 

— 

3.  I.G.P.   . 

2 

2 

4,  Director  &  equivalent 

7 

7 

5.  AddU.G.      . 

,      ■    ,                        ] 

(Post 
conver- 
ted into 
aD.r.G. 
who  has 
taken 
over)  , 

6.  Commissioner 

.1 

".'•  1 

7.  Under  Secretary  Class  I  senior   scale 

equivalent-A.O.— S.A.  to    Chairman           42 

35 

8.  Junior   Scale    Officer/O.S.D.            .             66 

30 

9.  Accounts  Officer     . 

1 

.  1 

10,  Section  Officers 

5 

5 

11.  P.  S.  to  Secretary 

1 

1 

12.  Court  Master 

1 

'■1' 

13.  Steno  Grade  'B' 

7 

\7 

14.  Inspectors 

.         -             38 

35 

15.  Steno  Grade  'C 

15 

13 

16.  Assistants 

10 

10 

17,  Sub-Inspectors 

.  -       .              51 

2? 

18.  Hindi  Translator 

1 

— 

19.  Steno  Grade  'D' 

41 

28 

20.  U.D.C. 

43 

39 

21 .  Junior  Reception  Officer 

1 

— 

22.  L.D.C. 

12 

10 

23.  Staff  Car  Driver      . 

4 

4 

24.  Motor  Cycie  Driver 

2 

2  , 

25.  Gestetner  Operator 

1 

1 

26,  Constables    . 

96 

62 

27.  Peons    . 

28.  Daftri 

29.  Jamedar 

30.  Farash  . 

31.  Sweepers 

32.  Contingency  paid  st 

art     '. 

1 
.         .              9 
1 
1  • 

.         .              2 

.         .              2 

38 

J 

1  Peon  & 
55  Con- 
tingency' 

i    paid 

r  staff 
making  . 
a  total  of 
56*. 

♦includes  3  persons  taken  against  vacant  posts  of  Constables. 


1.6  In  a  number  of  cases  the  records  of  the 
Government  of  India  were  called  for  by  the 
Commission  and  investigations  were  directed  by  the 
Commission  in  regard  to  the  matters  appearing  before 
it  within  any  of  .the  five  heads  of  the  Terms  of 
Reference. 

1.7  The  Commission  fixed  July  31,  1977,  as  the 
last  date  for  filing  complaints.  The  Commission  did 
not  entertain  any  complaints  received  thereafter.  The 
complaints  received  by  the  Commission  were 
categorised  as  under  : 

(I)   Complaints  which  do  not    fall    within    the 
purview  of  the  terms  of  reference  of  the 

Commission— to  be  filed  and  complainants 

informed  accordingly. 

(II)  Complaints  which  do  not  fall  within  the 
purview  of  the  terms  of  reference  of  the 
:  Commission  but  contain  serious  allegations — 
to  be  referred  to  ths  Central/State 
Governments  for  inquiry  and  appropriate 
action. 

(III)  Complaints  falling  within  ihe  terms  of 
reference  of  the  Commission  but'  not 
serious  enough  to  warrant  inquiry  by  the 
Commission  itself— to  be  referred  to  the 
Central/State   Governments   with    a    request 

■  ■  to  have  them  looked  into  at  an  appropriate 
level  and  action  as  deemed  fit  taken  there- 
on under  intimation  to  the  complainants. 

(IV)  Complaints  falling  within  the  purview  .  of 
the  terras  of  reference  of  the  Commission 
which  are  serious  enough  but     cannot     be 

."■'•.  handled  by  the  Commission's  staff  itself — 
.  to.  be  referred  to  the  Central/State  Govern- 
ments for  an  inquiry  by  a  committee/ 
authority  appointed  under  section  11  of 
Commissions  of  Inquiry  Act,  1952,  and  the 
findings  and  recommendations  of  authority 
to  be  submitted  to  the  Commission  for 
disposal  as  and  when  completed.  The 
State  Governments  have  also  been 
requested  to  take  whatever  remedial  action 
they  deem   fit  in   the  meanwhile. 

(V)  Selected  complaints  will  be  dealt  with  by 
the  Commission  through  its  own  investiga- 
ting agency. 

1.8  From  September  29,   1977   the     Commission 

I commenced  hearing  of  oral  evidence  of  witnesses  in 
•cases  Calling  within  its  terms  of  reference  and  which 
were  regarded  as  of  sufficient  importance. 

1.9  Since  the  terms  of  reference  did  not  name  any 
individual  or  body  of  individuals  as  responsible  for 
the  commission  of  an  excess  as  understood  in  a 
compendious  sense,  and  the  excesses  were  also  set 
out  in  general  terms,  the  Commission  in  the  first 
instance  invited  persons,  who  appeared  from  the 
investigations  made  by  the  officials  of  the  Commission 


and  from  the  complaints  received,  either  to  be 
responsible  for  the  excesses  or  to  be  victims  of  the 
excesses,  or  being  otherwise  able  to  throw  light  upon 
the  commission  of  the  excesses,  and  examined  those 

persons. 

1.10  At  that  stage,  the  Commission  requested  the 
persons  concerned  to  come  before  the  Commission 
and  to  assist  the  Commission  in  regard  to  certain 
transactions.  A  large  number  of  persons  appeared 
in  pursuance  of  the  request  of  the  Commission.  Some 
of  those  requested  did  not  choose  to  appear  before  the 
Commission,  some  appeared,  at  certain  stages  and 
thereafter  did  not  appear  and  raised  objections  after 
appearing  before  the  Commission  and  declined  to 
participate  in  the  proceedings  of  the    Commission. 

1.11  Evidence  of  the  persons  who  showed  willing- 
ness to  assist  the  Commission  was  heard  in  all'  but 
a  very  few  cases,  in  open  Session.  In  the  larger 
public  interests,  in-camera  sittings  were  held  in  a  few 
cases  for  examining  certain  witnesses.  If  on  a 
consideration  of  the  evidence,  it  appeared  to  the 
Commission  necessary  to  inquire  into  the  conduct  of 
any  person  or  the  Commission  was  of  the  opinion  that 
the  reputation  of  any  persons  was  likely  to  be  affected 
by  the  inquiry,  the  Commission  issued  notices  to  such 
persons  giving  them  opportunities  of  being  heard  in 
the  inquiry  and  to  furnish  to  the  Commission,  state- 
ments relating  to  the  matters  specified  in  the  notice 
under  rule  5(2)  (a)  of  the  Commissions  of  Inquiry 
(Central)  Rules,  1972.  The  Commission  also 
issued  summons  under  section  8B  ,of  the  Act  affording 
them  reasonable  opportunities  of 'being  heard  in  the 
inquiry  and  to  produce  evidence  regarding  their 
versions:  The  Commission  also  afforded 
opportunities  to  these  persons  to  cross-examine 
witnesses  other  than  the  witnesses  produced 
by  them  and  to  address  the  Commission.  The 
Commission  also  afforded  opportunity  to  all  the 
parties  to  be  represented  by  legal  practitioners. 

1;12  After  hearing  the  evidence  of  the  persons  to 
whom  notices  under  section  8B  were  issued  and  of 
the  evidence  of  the  witnesses  produced  in  support  of 
the  versions  of  those  pattios  and  also  considering  the 
evidence  of  the  witnesses,  who  had  been  examined 
for  the  Commission  and'  whose  presence  was  requested 
by  the  parties  to  whom  tiotices  under  section  8B  had 
been  issued,  the  Commission  gave  to  the  parties  or 
their  Advocates  opportunity  to  address  the  Commission 
on  the  evidenm, 


1.13  It  may,  however,  be  observed  that  the  request 
made  by  Smt.  Indira  Gandhi,  to  whom  notices  trader 
section  8B  had  been  issued,  to  examine  the  investiga- 
ting officers,  was  not  allowed  because  the  investigating 
officers  were  neither  witnesses  to  the  transactions  in 
regard  to  which  the  evidence  was  collected,  nor  were 
they  i  witnesses  Cor  the  Commission.  No  request  was 
made  to  examine  the  investigating  officers  as  witnesses 
in  support  of  the  version  of  Smt.  Gandhi, 


CHAPTER  II 


2.1  A  few  minutes  before  the' midnight  of  June  25, 
1975,  the  President  of  India  proclaimed  Emergency 
under  Article  352  of  the  Constitution.  The  order 
promulgating  the  Emergency  was  published  in  the 
Gazette  of  India,  Extraordinary,  on  the  June  26, 
1975.     It  reads  : 

NOTIFICATION 

G.S.R.  353(E).  The  following  Proclamation  of 
Emergency  by  the  President  of  India,  dated 
the  25th  June,  1975,  is  published  for  gene-' 
ral  information  : — 

"PROCLAMATION  OF  EMERGENCY" 

"In  exercise  of  the  powers  conferred  by 
clause  (1)  of  Article  352  of  the  Con-, 
stitution,  I,  Fakhruddin  Ali  Ahmed/ 
President  of  India,  by  this  proclamation 
declare  that  a  grave  emergency  exists 
whereby  the  security  of  India  is  threat- 
ened by  internal  disturbances." 

2.2  There  was,  however,  already  in  force  a  Pro- 
clamation of  Emergency,  which  was  issued  on  Decem- 
ber 3,  1971,  by  the  President  of  India  on  the  ground 
that  the  security  of  India  was  threatened  by  external 
aggression.  Thereafter  on  December  4,  1971  the 
Defence  of  India  Rules,  1971  were  published. 

2.3  By  virtue  of  Article  35S  of  the  Constitution 
freedoms  guaranteed  under  Article  19  of  the  Consti- 
tution restricting  the  power  of  the  State  to  make  any 
law  or  to  take  any  executive  action  which  the  State 
would  but  for  the  provisions  contained  in  Part  III  be 
competent  to  make  or  to  take,  remained  suspended 
till  the  withdrawal  of  the  Emergency  proclaimed  on 
June  25,  1975. 

2.4  After  the  declaration  of  Emergency,  the 
President  of  India  issued  an  order  under  Article  359 
of  the  Constitution  on  June  27,  1975,  suspending  the 
right  to  move  any  court  for  the  enforcement  of  funda- 
mental rights  conferred  by  Article  14,  21  and  22  of 
the  Constitution. 


2.5  The  following 
were  made  :— 

1975: 

1 


important  statutory    provisions 


The  Defence  of   India    (Amendment)    Act,    1975 
(No.  32  of  1975)  dated  July  31,  1975. 

This  Act  extended  the  provisions  of  the  Defence  of 
India  Act,  1971,  till  the  proclamation  of  Internal 
Emergency  lasted  and  for  a  period  of  six  months 
thereafter.  It  also  added  words  like  internal  security 
and  internal  disturbances  in  the  preamble  of  the  prin- 
ciple Act. 


2.  The  Conservation  of  Foreign  Exchange  and  Pre- 
vention of  Smuggling  Activities  (Amendment) 
Act,  1975  (No.  35  of  1975)  dated  August  1, 
1975. 

This  amendment  provided  for  the  following  :— 

(a)  no  detention  order  under  the  Act  should,  be 
invalid  or  inoperative  merely  because  some 
of  the  grounds  of  the  order  are  vague,  non- 
existent, not  relevant  or  invalid  for  any 
reason; 

(b)  no  person  detained  under  this  Act  shall  be 
released  on  bail,  bail-bond  or  otherwise  ; 

(c)  the  detention  could  be  made  for  dealing 
effectively  with  the  Emergency  and  in  such 
contingency  no  grounds  need  be  conveyed 
to  the  detenu. 

3.  The  Maintenance  of  Internal  Security  (Amend* 
inent)  Act,  1975  (No.  39  of  1975)  dated  August 
5,  1975. 

This  amendment  provided  for  : — 

(a)  revocation  of  a  detention  order  shall  not 
bar  making  another  detention  against  the 
same  person; 

(b)  person  detained  under  section  15  shall  not 
be  released  on  bail,  bail-bond  or  otherwise; 
and 

(c)  a  new  well-known  section  16A  was  added 
barring  provisions  of  grounds  and  approach 
to  a  law  Court. 

4.  The  Election  Laws  (Amendment)  Act,  1975 
(No.  40  of  1975)  dated  August  6,   1975. 


This ,  amendment  provided  for  :  — 

(a)  every  case  of  disqualification  under  section 
8A  shall  be  referred  to  the  President  who 
could  condone  it  in  consultation  with  the 
Election  Commission; 

(b)  Section  77 (i)  of  the  Act  was  amended  to 
replace  date  of  publication  of  the  notifica- 
tion calling  the  elections  by  words  "the  . 
date  on  which  he  has  been  nominated"  and 
also  excluding  the  actions  of  the  govern- 
ment servants  in  normal  discharge  of  their 
duties  like  making  arrangements  etc.; 

(c)  publication  in  gazette  notification  regarding 
appointment  and  resignation  of  a  govern- 
ment servant  shall  be  treated  as  an  effective 
proof  of  the  same, 


i'ii,.-w  ■  em 


The  above  amendments  were  given  retrospective 
effect .  covering  even  the  election  petitions  pending 
before  the  Courts  including  appeals  before  the 
Supreme  Court. 

5.  The  Constitution  (Thirty-eighth  Amendment) 
Act,  1975  dated  August  1,  1975. 

By  the  Thirty-eighth  Amendment  Act  power  to 
issue  Ordinances  by  the  President,  the  Governor  and 
the  Administrator  under  the  relevant  provisions  of 
the  Constitution  was  conferred,  laying  down  that 
their  satisfaction  as  to  the  necessity  of  immediate 
action  shall  be  final  and  conclusive  and. shall  not  be 
questioned  in  any  Court  on  any  ground.  The  Thirty- 
.  eighth  Amendment  also  entitled  the  President  to  issue 
different  proclamations  on  different  grounds  and  to 
malce  satisfaction  of  the  President  as  to  the  emer- 
gency final  and  conclusive.  During  the  Emergency 
the  satisfaction  and  the  declaration  of  the  Emergency 
could  not  be  questioned  in  any  Court  on  any  ground. 

6.  The  Constitution  (Thirty-ninth  Amendment)  Act, 
1975  dated  August  10,  1975. 

This  amendment  inter  alia  provided  for  : — 

(a)  the  election  of  President  and  Vice-President 
shall  not  be  questioned  in  any  Court; 

(b)  similarly,  elections  of  the  Prime  Minister 
and  the  Speaker  of  the  House  were  placed 
above  the  law  Courts  and  were  to  be  judg- 

■  ed  by  a  Body/Authority  to  be  constituted 
by  the  Parliament. 

The  .  above  mentioned  amendments  prevented  even 
filing  of  election  petitions  against  the  named  persons 
and  even  pending  petitions/ abated.  " 

1976: 

7.  The  Maintenance  of  Internal  Security  (Amend- 
ment) Act,  1976  (No.  14  of  1976)  dated 
January  25,  1976. 

The  amendment  inter  alia  provided  for  : — 

.  (a)  re-detention  of  a  person  whose  "order    has 
been  earlier  revoked; 

(b)  authorising  Central  Government  to  obtain 
details  regarding  detentions  from  the  State 
Governments; 

(c)  making  the  grounds  of  detention  as  con- 
fidential and  barring  its  disclosure  to  any 

'  r-      one. 

8.  The  Maintenance  of  Internal  Security  (Second 
Amendment)  Act,  1976  (No.  "78  of  1976)  dated 
August  25,  1976. 

This    amendment    made    Section    16A    applicable 
from  June  29,  1975     with    retrospective  effect.     By 
this   amendment   the   maximum   period   of  detention 
was  extended  from'  12  to  24  months. 
S/39  HA/77— 2 


9.  The  Press  Council  (Repeal)  Ac(,  1976  (No.  24 
of  1976)  dated  February  .2,  1976. 

The  Press  Council  Act,  1965  was  repealed  from 
January  1,  1976  dissolving  the  Press  Council  of 
India  and  also  abating  of  cases,  suit,  appeals  etc., 
pending  before  Court  in  which  Press  Council  was  a 

party, 

10.  The  Prevention  of  Publication  of  Objectionable 
Matter  Ad,  1976  (No.  27  of  1976)  dated 
February  2,  1976. 

This  Act  provided  for    : — ■  ■ 

(a)  inclusion  in  the  expression  "objectionable 
matter"  any  words,  signs  or  visible  repre- 
sentations which  are  defamatory  of  the 
President  of  India,  the  Vice-President  of 
India,  the  Prime  Minister  or  the  Speaker  of 
the  House  of  the  People  or  the  Governor 
of  a  State; 

(b)  seizure  of  copies  of  the  publication  made  in 
disobedience  of  the  Central  Government 
order  prohibiting  the  printing  or  publica- 
tion, closure  of  any  printing  press  or  other 
instrument  or  apparatus  used  in  the  publi- 
cation; 

(c)  power  to  demand  security  from  the  presses, 
publishers  and  editors  of  newspapers  and 
news  sheets,  when  it  appears  to  the  compe- 
tent authority  that  the  publication  con- 
tains any  objectionable  matter; 

(d)  power  of  the  Central  Government  to  declare 
certain  publications  forfeited.  '   .■' 

11.  Parliamentary  Proceedings  (Protection  of   Publi- 
cation)  Repeal    Act,  1976  (No.  28    of  1976) 

dated  February  11,  1976.   : 

By  this  Act  the  Parliamentary  proceedings  (Pro 
tection  of  Publication)  Act,  1965  was  repealed  and 
came  in  force  from  December  8,  1975. . 

12.  The  Constitution  (Forty  Second  Amendment) 
Act,  1976  dated  December  18,  1976. 

The  Constitution  was  extensively  amended  by  59 

clauses. 


1977: 

13    The  Representation  of  the  People  (Amendment) 
Ordinance,  1977  (No.  1  of  1977). 

The  Ordinance  amended  the  Section  8(a)  of  the 
Act  substituting  the  words  that  the  President  shall 
act  on  the  advice  of  the  Election  Commission  with 
regard  to  disqualification  :  "shall  consult  the  Election 
Commission  and  the  Election  Commission  may  for 
this  purpose  make  such  enquiries  as  it  thinks  fit". 


14.  The)  Disputed    Elections  (Priine    Minister    and 
Speaker)  Ordinance,  1977  {No.  4  of  1977). 

'By.  this  Ordinance  a  council  was  constituted  in 
case  of  disputed  elections  of  the  Prime  Minister  and 
the  Speaker  as  per  the  earlier  amendment  in  the 
People's  Representation  Act. 

15,  The  Presidential  and-  Vice-Presidential     Elections 
'  {Amendment)  Ordinance,  1977  (No.  3  of  1977). 

This  Ordinance  made  similar  provisions  as  above 
in  case  of  President  and  Vice  President. 

2.6  After  the  declaration  of  Emergency  a  number 
of  legislative  and  regulatory  measures .  were  taken 
with  a  view  to  impose  censorship  on  the  Press.  On 
June  26,  1975,  a  Censorship  Order  was  passed  by 
the  Central  Government  under.  Rule  (1)  of  the  De- 
fence of  India  Rules,  1971.  On  July  5,  1975,  the 
Central  Government  directed  that  an  order  made 
under  Rule  4S  of  the  Defence  and  Internal  Security 
Rules  by  .a  State  Government  or  by  any  office  oi 
authority  authorised  in  this  behalf  by  the  State  Gov- 
ernment before  July  15,  1975,  should  not  continue  on 
or  after  that  date,  except  in  accordance  with  such 
instructions  as. the  Central  Government  might  give  to 
the  State  Government  in  that  behalf. 

'•!  2.7  On  July  6,  1975,  a  notification  was  issued  by 
the  Centra]  Government  and  a  new  sub  rule  was  in- 
serted in  Rule  48.  The  Censorship  Order  was  amend- 
ed on  July  6,  1975,  and  on  July  13,  1975,  confi- 
dential instructions  were  issued  by  the  Chief  Censor 
to  the  Censoring  authorities  in  the  States.  On  July 
31,  1975,  the  Defence  of  India  (Amendment)  Ac!, 
1975  (Act  32  of  1975)  was  repealed  and  re-enacted 
as  the  Defence  of  India  (Amendment)  Ordinance, 
1975.  On  August'  5,  1975,  guidelines  for  the  Press 
were  issued  by  the  Chief  Censor.  On  August  11, 
1-975,  a  notification  was  issued  by  the  Central  Gov- 
ernment further  amending  Rule  48  by  enacting  De- 
fence and  Internal  Security  of  India  (Second  Amend- 
ment) Rules,  1975.  On  August  12,  1975,  a  notifi- 
cation was  issued  by  the  Central  Government  enact- 
ing the  Defence  and  Internal  Security  of  India  (Third 
Amendment)  Rules,  1975,  whereby  Rule  48  of  the 
said  Rules  was  further  amended. 


■2.8  On  January  8,  1976,  a  Presidential  Order  was 
issued  under  Article  359(1)  of  the  Constitution  sus- 
pending the  right  to  move  any  court  for  the  enforce- 
ment of  fundamental  rights  conferred. by  Article  19 
of  the  Constitution,  On  March  13,  1976,  orders 
were  issued  by  the  Central  Government  amending  the 
Central  Censorship  order. 

2.9  The  declaration  of  Emergency  and  the  conse- 
quent suspension  of  the  fundamental  rights  under 
Article  19,  resulted  in  the  suspension  of  the  protec-i 
tion  of  Articles  14,  21  and  22  by  the  issue  of  the' 
Presidential  order  in  exercise  of  the  powers  under 
Article  359  .of  the  Constitution,  and  by  the  amend- 
ment, of  Article  352  making  the  satisfaction  of  the 
President  final  and  conclusive  and  not  liable  to  be 
questioned  in  any  court  on  any  ground  and  subject 
to  the  provisions  of  clause  (2)  taking  away  the  juris- 
diction of  the  Supreme  Court  or  any  other  court  to' 
entertain  any  action  on  any  ground  regarding  the 
validity  of  the  declaration  made  by  the  proclamation 
of  the  President  to  the  effect  mentioned  in  clause  (I) 
or  to  the  continued  operation  of  the  proclamation, 
and  restrictions  imposed  upon  the  authority  of  the. 
courts  to  grant  protection.,  against  the  infringement 
of  basic  human  rights  enumerated  in  Article  19;  all 
protection  against  arbitrary  action  was  taken  away  for 
the  duration  of  the  Emergency.  The  right  of  equality 
under  Article  14,  the  right  of  fundamental  guarantee' 
against  deprivation  of  life  and  personal  liberty 
according  to  procedure  established  by  law  also  stood 
suspended  and  the  protection  against  arrest  and  de- 
tention could  not  be  challenged'  before  the  courts. 
The  right  of  free  speech  and  expression,  right  to 
assemble  peacefully,  to  form  associations  and  unions; 
to  move  freely  throughout  the  territory  of  India;  -to 
reside  and  settle  in  any  part  of  the  territory  of  India; 
to  acquire,  hold  and  dispose  of  property  and  to 
practice  any  profession,  or  to  carry  on  any  occupa- 
tion, trade  or  business,  which  were  guaranteed  under 
clause  (1)  of  Article  19,  could  not  thereafter  be 
exercised. 

2.10  As  a  sequel  to  this  a  number  of  restrictions 
were  imposed  upon  the  newspapers  by  the  issue  of 
Censorship  Orders  and  the  amendments  thereafter 
from  time  to  time.  Jurisdiction  of  the  Courts  to 
entertain  actions  designed  to  challenge  the  validity  of 
actions,  legislative  and  executive,  of  the  State  were 
also  circumscribed. 


^^^^mmmmmmrnmmmmmmmmsr^ 


ilAwteto '-.-■!_       —  - *j 


-     -ot1*    i.3»wrto. 


CHAPTER  ill 


In  the  first  instance  the  procedure  followed  by  the 
Commission  may  be  explained  because  certain  persons 
and  especially  Smt.  Indira  Gandhi,  former  Prime 
Minister;  arid  Shri  .Pranab  Kumar  Mukherje.e,  a 
former  Minister  of  State  in  the  Ministry  of  Finance, 
raised  objections  to '  the  legality  of  the  procedure 
followed  by  the  Commission;  and  have  on  the  plea 
of  illegality  of  procedure  declined  not  only  not  to 
assist  the  Commission  but  even  have  declined  to  file 
statements  relating  to  their  versions  of  the  transactions 
which  formed  the  subject-matter  of  inquiries  into 
excesses  in  which  they  appeared  to  be  concerned  and 
'to  take  oath  and  give  evidence  pursuant  to  notices 
under- section  8B  of  the  Commissions  of  Inquiry  Act, 
1952.  Section  3 -of- the  Commissions  of  Inquiry  Act, 
1952,  provides — 

"(1)  The  appropriate  Government . may,  if  it  is 

of  opinion  that  it  is  necessary  so  to  do,  and 

shall,  if  a  resolution  in  this  behalf  is  passed 

by  the  House  of  the  People  or,  as  the  case 

may  be,  the  Legislative  Assembly  of  the 

State,  by  notification  in  the  Official  Gazette, 

appoint  a  Commission  of  Inquiry  for  the 

purpose  of  making  an  inquiry     into     any 

definite   matter  of  public  importance      and 

performing  such  functions  and  within  such 

time  as  may  be  specified  in  the  notification, 

■:.  ,', :.__    .  and  the  Commission  so  appointed  shall-make 

-.;' '  :    --...  the    inquiry     and     perform     the     functions 

:.:. accordingly  ; 


Provided  that  ' 

* 

* 

* 

* 

(2)      . 

* 

* 

* 

* 

(3) 

* 

* 

* 

* 

(4) 

* 

*  ■ 

* 

*\*< 

■    Section    4    provides    that    the    Commission    shall 
.have  the  powers  of  a  civil  court,    whife  trying  a  suit 
under  the  Code  of  Civil  Procedure,  1908,  in  respect 
of  the  following  matters,  namely  : — 

"(a)  summoning  and  enforcing  of  attendance 
of  any  person  from' any  part  of  India  and 
examining  him  on  oath; 

(b)  requiring    the    discovery    and    production 
of  any  document; 

(c)  receiving  evidence  on  affidavits; 

(d)  requisitioning  any     public  record   or     copy 

thereof  from  any  court  or  office; 

(e)  issuing    commissions    for    the    examination 
of  witnesses  or  documents^, 

(f)  any  other  matter  which  may  be  prescribed." 

Section  5  provides  for  the  conferment  of  additional 
powers  on  the  Commission: 

"(1)  Where  the  appropriate  Government  is  of 
opinion  that,  having  regard  to  the  nature  of 


the  inquiry  to  be  made  and  other  circum- 
stances of  the  case,  all  or  any  of  the 
provisions  of  sub-section  (2)  or  sub-seclion 
(3)  or  sub-section  (4)  or  sub-section  (5) 
should  be  made  applicable  to  a  Commission, 
the  appropriate  Government  may,  by 
notification  in  the  Official  Gazette,  direct 
that  all  or  such  of  the  said  provisions  'as 
may  be  specified  in  the  notification  shall 
apply  to  that  Commission  and  on  the  issue 
of  such  a  notification,  the  said  provisions 
shall  apply  accordingly. 

(2)  The  Commission  shall  have  the  power  to 
require  any  person,  subject  to  any  privilege 
which  may  be  claimed  by  that  person  under 
any  law  for  the  time  being  in  force,  to 
furnish  information  on  such  points  or  matters 
as,  in  the  opinion  of  the  Commission,  may 
be  useful  for  or  relevant  to,  the  subject 
matter  of  the  inquiry  and  any  person  so 
required  shall  be  deemed  to  be  legally 
bound  to  furnish  such  infoimation  within 
the  meaning  of  section  176  and  section  177 
of  the  Indian  Penal  Code. 


(3)  The  Commission  or  any  officer,  not  below 
.__.  .    the.  rank  of  a  gazetted     officer,     specially 

authorised  in  this  behalf  by  the  Commission 
may  enter  any  building  or  place  .where  the 
Commission  has  reason  to  believe  that  any 
books  of  account  or  other  documents  relating 
to  the  subject-matter  of  the  inquiry  may  be 
found,  and  may  seize  any  such  books  of 
account  or  documents  or  take  extracts  or 
copies  therefrom,  subject  to  the  provisions 
of  section  102  and  section  103  of  the  Code 
of  Criminal  Procedure,  1898,  in  so  far  as 
they  may  be  applicable. 

(4)  *        *         *         * 

(5)  *         *         *         * 

Under  section  5A  it  is  provided  : 

"(1)  The  Commission  may,  for  the.  purpose  of 
conducting  any  investigation  pertaining  to 
the  inquiry,  utilise  the  services, — 

(a)  in  the  case  of  a  Commission  appointed  by 

the  Central  Government,  of  any  officer  or 
investigation  agency  of  the  Central 
Government  or  any  State  Government  *  * 

(b)  *         * '       *  ■       * 

(2)  For  the  purpose  of  investigating  into  any 
matter  pertaining  to  the  inquiry,  any  officer 
or  agency  whose  services  are  utilised  under 


sub-section  (1)  may,  subject  to  the  direction 
and  control  of  the  Commission, — 

(a)  summons  and  enforce  the  attendance  of  any 

person  and  examine  him  ; 

(b)  require   the   discovery   and   production   of 

any  document;  and 

(c)  requisition    any    public    record    or    copy 

thereof  from  any  office. 

(3)  *  #  *  * 

(A)  The  officer  or  agency,  whose,  services  are 
utilised  under  sub-section  (1)  shall  investi- 
gate into  any  matter  pertaining  .to  the  in- 
quiry and  submit  a  report  thereon  (here- 
after in  this  section  referred  to  as  the 
investigation  report)  to  the  Commission, 
within  such  period        *         *        * 

(5)  The  Commission  shall  satisfy  itself  about  the 
correctness  of  the  facts  stated  and  the  con- 
clusions, if  any,  arrived  at  in  the  investi- 
gation report  submitted  to  it  under  sub- 
section (4),  and  for  this  purpose  the  Com- 
mission may  make  such  inquiry  (including 
the  examination  of  the  person  or  persons, 
who  conducted  or  assisted  in  the  investiga- 
tion) as  it  thinks  fit. 

(6)  No  statement  made  by  a  person  in  the  course 
.  ;     -    of  giving  evidence  before  the  Commission 

.  shall  subject  him  to,  or  be  used  against 
him  in,  any  civil  pr  criminal  proceeding  ex- 
cept a  prosecution  for  giving  false  evidence 
by  such  statement : 

Provided  that  the  statement — 

fa)  is  made  in  reply  to  a  question  which  he  is 
required  by  the  Commission  to  answer, 
pr 

(b)  is  '.relevant  to  the    subject-matter  of     the 
inquiry." 

Section  8  provides  : 

"The  Commission  shall,  subject  to  any  rules  that 
may  be  made  in  this  behalf,  have  power  to 
regulate  its  own  procedure  (including  the 
fixing  of  places  and  times  of  its  sittings  and 
deciding  whether  to  sit  in  public  or  in 
private)." 

"Section  8B  provides: 

"If,  at  any  stage  of  the  inquiry,  the  Commis- 
sion,— 

(a)  considers  it  necessary  to  inquire  into  the 
conduct  of  any  person;  or 

(b)  is  of  opinion  that  the  reputation     of    any 
person  is  likely  to  be  prejudicially  affect- 
ed by  the  inquiry, 

The  Commission  shall  give  to  that  person 
a  reasonable  opportunity  of  being  heard  in 


the  inquiry  and  to    produce  evidence  m  his 
defence : 

Provided  that      .  *         * 

Section  8C  provides ; 

"The  appropriate  Government,  every  person  re- 
ferred to  in  section  8B  and,  with  the    pei'- 
•  mission  of  the  Commission,  any  other  per- 
son    whose  evidence  is  recorded     by  the 
Commission, —  , 

(a)  may  cross-examine  a  witness  other  than  a 

witness  produced  by  it  or  him  ; 

(b)  may  address  the  Commission ;  and 

(c)  may  be  represented  before  the  Commission 

by  a  legal  practitioner  or,  with  the  per- 
mission of  the  Commission,  by  any  other 

person." 

Section  11  provides  :  ■ 

"Where  any  authority  (by  whatever  name  called), 
other  than  a  Commission  appointed  under 
section  3,  has  been  or  is  set  np  under  any 
resolution  or  order  of  the  appropriate 
Government  for  the  purpose  of  making  an 
inquiry  into  any  definite  matter  of  public 
importance  and  that  Government  is  of 
opinion  that  all  or  any  of  the  provisions  of 
this  Act  should  be  made  applicable  to  that 
authority.  The  Government  may,  subject  to 
the  prohibition  contained  in  the  proviso  to 
sub-section  (1)  of  section  3,  by  notification 
in  the  Official  Gazette,  direct  that  the  said 
provisions  of  this  Act  shall  apply  to  that 
authority,  and  on  the  issue  of  such  a  notifi- 
cation that  authority  shall  be  deemed  to  be 
:  a  Commission  appointed  under  section  3  for 
the  purposes  of  this  Act." 

By  Section  12  power  is  conferred  upon  the  appropriate 
Government  to  make  Rules,  to  carry  out  the  purposes 
of  the  Act. 

3.1  Pursuant  to  the  power  conferred  by  section 
12,  the  Central  Government  have  published  on  July 
15,  1972,  the  Commission  of  Inquiry  (Central) 
Rules,  1972.  Rule  5  sets  out  the  procedure  of 
inquiry  : 

"(1)  A  Commission  may  sit  in  public  or  in 
private  as  it  thinks  fit : 

Provided  that  a  Commission  shall  sit  in 
private  on  a  request  being  made  by  the 
Central  Government  in  that  behalf. 

(2)  A  Commission  shall,   as  soon  as  may  be 
after  its  appointment — 

(a)  issue  a  notice  to  every  person,  who  in  its 
opinion  should  be  given  an  opportunity 
of  being  heard  in  the  inquiry,  to  furnish 
to  the  Commission  a  statement  relating 
to  such  matters  as  may  be  specified  in 
the  notice ; 


lS^:r.■s;SJfc'V^^-l^s"'i»-"'•■i'""""J, 


■  (b).  issue  a  notification,  to  be  published  in 
such  manner  as  it  may  deem  fit,  inviting 
all  persons  acquainted  with  the  subject 
matter  of  the  inquiry  to  furnish  to  the 
Commission  a  statement  relating  to  such 
matters  as  may  be  specified  in  the 
notification. 

(3)  Every  statement  furnished  under  clause  (a) 
of  sub-rule  (2)  shall  be  accompanied  by  an 
affidavit  in  support  of  the  'facts  set  out  in 
the  statement  sworn  by  the  person  furnish- 
ing the  statement. 

(4)  Every  person  furnishing  a  statement  under 
clause  (a)  of  sub-rule  (2)  shall  also  furnish 
to  the  Commission  along  with  the  statement 
a  list  of  the  documents,  if  any,  on  which  he 
proposes  to  rely  and  forward  to  the  Com- 
mission, wherever  practicable,  the  originals 
or  true  copies  of  such  of  the  documents  as 
may  be  in  his  possession  or  control  and 
shall  state  the  name  and  address  of  the 
person  from  whom  the  remaining  docu- 
ments may  be  obtained. 

(5)  (a)  A  Commission  shall  examine  all  the 
statements  furnished  to  it  under  clause  (b) 
of  sub-rule  (2)  and  if,  after  such  examina- 
tion, the  Commission  considers  it  necessary 
to  record  evidence,  it  shall  first  record  the 
evidence,  it  any,  produced  by  the  Central 
Government    and    may    thereafter    record 

■   evidence  in  such  order  as  it  may  deem  fit, — 

:  (i);  the  evidence  of  any  person,  who  has 
furnished  a  statement  under  clause  (a) 
of  sub-rule  (2)  and  whose  evidence  the 
Commission  having  regard  to  the  state- 
ment, considers  relevant  for  the  purpose 
of  the  inquiry  ;  and 

(ii)  the  evidence  of  any  other  person,  whose 
evidence  in  the  opinion'  of  the  Commis- 
sion is  relevant  to  the  inquiry  : 

Provided  that  the  Commission  may  dispense  with 
the  attendance  of  any  person  for  the  purpose 
of  giving  evidence  before  it  if  in  its 
opinion — - 

(i)  such  attendance  cannot  be  enforced 
except  by  causing  undue  hardship  or 
inconvenience  to  that  person ;  or 

(ii)  such  attendance  should  be  dispensed 
with  for  any  other  sufficient  reason  to  be 

recorded  by  it  in  writing. 

(b)  If  after  all  the  evidence  is  recorded  under 
clause  (a)  of  sub-rule  (5),  the  Central 
Government  applies  to  the  Commission  to 
recall  any  witness  already  examined  or'  to 
examine  any  new  witness,  the  Commission, 
if  satisfied  that  it  is  necessary  for  the  proper 
determination  of  any  relevant  fact  to  do  so, 
shall  recall  such  witness  or  exmine  any  such 
new  witness. 


(7)  The  Commission  shall  have  the  powers  of 
a  civil  court  to  make  local  investigation, 
either  personally  or  through  any  person, 
duly  authorised  by  it,  into  any  matter  falling 
within  its  terms  of  reference. 

(8)  A  Commission  shall  have  the  power  to 
regulate  its  own  procedure  in  respect  of 
any  matter  for  which  'no  provision  is  made 
in  these  rules." 

3.2  The  Commission  framed  certain  Regulations' 

relating  to  Regulations  of  Procedure  to  be  followed 
by  the  Commission  in  exercise  of  the'  powers  conferred 
by  clause  (8)  of  Rule  5. 

3.3  By  the  Act  the  appropriate  Government  is 
audiorised  to  set  up  a  Commission  of  Inquiry  for 
determining  the  facts  and  circumstances  relating  to 
any  matter  of  public  importance.  The  appropriate 
Government  is  authorized  to  appoint  a  Commission, 
which  shall  exercise  the  powers  set  out  in  section  4 
of  the  Act.  The  Commission  may  be  invested  with 
additional  powers  under  sections  5  and  6  for  utilising 
the  services  of  officers  and  investigating  agencies  for 
conduct  of  investigations  pertaining  to  the  Inquiry.  The 
function  of  the  Commission  is  to  determine  facts  rela- 
ting to  the  matters  of  definite  public  importance  for  the 
purpose  of  making  inquiries  thereto. 

3.4  The  proceedings  of  the  Commission  are,  neither 
of  the  nature  of  a  civil  suit,  where  contesting  parties 
are  arrayed  on  opposite  sides,  one  pleading  that  a  civil 
right  has  been  infringed  and  the  other  contesting  that 
claim.  Nor  are  the  proceedings  of  the  nature  of  a 
criminal  proceeding,  in  which  it  is  pleaded  that  a  per- 
son or  persons  have  committed  infraction  of  the  law 
and  has  or  have  on  that  account  incurred  liability  for 
imposition  of  a  penalty  prescribed  by  law.  In  the  case 

"for  trial  of  a  suit  the  function  of  the  court  is  to  deter- 
mine the  civil  rights  and  to  grant  appropriate  relief 
to  the  person  claiming  to  be  aggrieved  ;  if  the  infraction 
o'f  his  right  is  proved,  the  liability  of  the  person  infring- 
ing the  tight  is  established  :  in  a  criminal  trial  the 
function  of  the  court  is*  to  determine  whether  the 
action  of  a  person  charged  with  the  commission  of  an 
infraction  of  a  law  is'  established  to  have  been  com- 
mitted by  him  and  whether  such  an  infraction  is 
established  beyond  reasonable  doubt.  These  proceedings 
are  adversary  proceedings — one  party  alleging  existence 
of  a  certain  right  and  the  other  party  denying  the  right 
or  the  statement  of  the  complainant  alleging  infraction 
of  the  law  by  the  other  party  and  the  other  party 
denying  such  infraction. 

3.5  Functions  of  the  Commission  under  the  Act 
are,  however,  of  an  entirely  different  nature.  The  Com- 
mission is  not  concerned  with  the  establishment  of  any 
civil  ,rights  or  the  infraction  of  those  rights.  The  Com- 
mission is  also  not  concerned  to  determine  the 
infraction  of  any  laws  involving  the  imposition  of  any 
penalty  upon,  a  person  charged  with  the  commission  of 
infraction  of  a  law.  ^The  proceedings  before  the  Com-' 
mission  are  not  of 'an  adversary  character.  It  is  the 


.10 


duty  of  the  Commission  appointed  for  that  purpose  to 
make  an  inquiry  into  the  subject  matter  of  the  "inquiry 
if  the  subject-matter  is  of  definite  public  importance. 
For  that  purpose,  the  Commission  is  invested  with 
certain  powersj  set  out  in  section  4  and  5  of  the  Act. 

3.6  The  Commission,  constituted  under  section  3 
o'i  the  Commissions  of  Inquiry  Act,  may  be  called 
upon  to  'hold  inquiries  into  a  yariety  of  matters  of 
definite  public  importance,  The  matters  of  public  im- 
portance may  relate  to  the  conduct  of  a  particular 
person,  or  a  group  of  persons,  or  as  in  the  present  case 
to  investigate  into  a  definite  matter/matters  of  public 
importance.  The  Commission  may  be  invested  with 
the  powers  to  hold  an  Inquiry  into  certain  transactions 
without  specifying  the  names  of  persons  responsible 
therefor ;  and  leaving  it  to  the  Commission  to  deter- 
mine :  (i)  whether  the  transaction  relating  to  a  matter 
of  public  importance,  referred  to  in  the  terms-  of 
reference  has  been  committed  ;  and  (ii)  to  identify  the 
person  or  persons  primarily  responsible  therefor.  In 
view  of  the  variety  of  transactions  or  subject  matters 
in  respect  of  which  the  Commission  may  be  appointed 
to  inquire,  the  Legislature  has  not  prescribed  any  defi- 
nite form  of  procedure;  and  has  left  it  to  the  Commis- 
sion by  section  8  to  regulate  its  own  procedure.  This 
power  is,  however,  not  unguided  and  is  subject  to  the 
Rules  that  may  be  made  in  that  behalf  by  the  Central 
Government.  The  Commission  is,  in  each  case,  having 
regard  to  the  nature  of  the  inquiry  to  be  made  and 
having  also  regard  to  the  nature  of  the  definite  matters 
of  public  importance,  which  it  is  called  upon  to  inquire 
into,  authorised  to  regulate  its  own  procedure,  but 
subject  to  such  Rules  which  the  Central  Government 
may  make  in  that  behalf.  Certain  other  restrictions 
are  also  imposed  by  sections  8B  and  8C  on  the  power 
Of  the  Commission  to  regulate  its  own  procedure.  In 
other  words,  the  Commission  must  be  guided  in  adopt- 
ing its  procedure  by  the  Rules  prescribed  in  that  be- 
half; and  also  comply  with  the  requirements,  of  sections 
SB  and  8C  of  the  Act. 

3.7  In  disposing  of  the  objections  raised  by  Smt. 
Indira  Gandhi  by  the  order  of  the  Commission  dated 
December  5,  1977,  the  Commissioii  observed  that  it 
proposed  to  follow  a  procedure,  which  after  consi- 
derable thought  the  Commission  felt  advised  to  follow 
in  holding  the  inquiry  in  regard  to  the  terms  of  refe- 
rence for  making  inquiry  ;  first,  to  determining  whether 
an  excess  falling  within  the  terms  of  reference  was 
committed  :  and  if  the  Commission  was  satisfied  on  a 
consideration  of  the  materials  placed  before  it  that 
there  was,  prima  facie,  evidence  of  the  commission  of 
any  excess,  or  excesses  and  such  other  evidence  which 
may  be  given  before  the  Commission  to  supplement 
the  same,  by  persons  invited  to  appear  before  the 
Commission,  the  procedure  prescribed  for  summoning 
persons,  who  may  appear  to  be  involved  in  the  com- 
mission of  those  excesses,  would  be  resorted  to,  to 
appear  before  the  Commission,  and  explain  after  an 
appropriate  notice  under  rule  5(2)  (a)  was  issued  and 
an  opportunity  was  given  to  such  persons  under  section 
SB  of  the  Act. 

3.8  It  was  made  clear  that  at  that  stage  the  Com- 
mission was  not  compelling  any  person  to  come  before 


the  Commission.  The  Commission  was  only  inviting 
persons  who  could  assist  the  Commission  in  the  investi- 
gation with  regard  to  the  alleged  excesses  ;  to  appear 
before  the  Commission ;  and  that  if  the  Commission 
was  satisfied  on  a  perusal  of  the  materials  placed 
before  it : 

"(i)   as  to  the  commission  of  an  excess  ;'  and 

(ii)  the  prima  jade  evidence  of  his  or  her 
involvement  in  the  commission  of  that 
excess," 

the  inquiry  would  be  held  strictly  in  accordance  with 
the  terms  of  sections  8B  and  8C  of  the  Act.    . 

3.9  After  consideration  of  the  evidence  o'f  witnesses, 
who  had  come  to  assist  the  Commissioii  in  regard  to 
various  transactions  in  the  light  of  the  investigations 
made  by  investigating  staff ;  and  the  documents  within 
its  cognizance,  the  Commission  issued  notices  to  several 
other  persons  under  rule  5(2)  (a)  of  the  Commission 
o£  Inquiry  Rules,  1972,  calling  upoii  them  to  file  their 
statements  relating  to  certain  matters,  specified  in  the 
notices  issued  to  them.  Summonses  were  also  issued 
under  section  8B  of  the  Commissions  of  Inquiry  Act. 

3.10  Smt.  Indira  Gandhi  objected  to  this  procedure  ; 
and  declined  to  file  a  statement  pursuant  to  the  notice 
under  rule  5(2)  (a)  and  in  the  manner  provided  in 
rule  5(3)  and  to  take  oath  or  give  evidence  on  oath  ; 
and  raised  a  number  of  objections,  which  are 
broadly:— 

(i)  that  the  procedure  followed  by  the  Com- 
mission is  improper  or  illegal ; 

(ii)  that  her  refusal  to  file  a  reply  or  a  statement, 
as  required  under  rule  5(2)  (a)  as  justified 
because  the  notice  was  not  issued,  with  the 
least  practicable  delay  and  in  any  event,  when 
a  notice/summons  under  section  8B  of  the 
Act  has  been  .issued,  such  a  notice  under 
rule  5  (2)  (a)  cannot  be  issued  ;  and 

(iii)  that  the  appropriate  procedure  for  hearing 
of  the  Commission  must  be  analogous  to  the 
procedure  in  a  criminal  trial,  that  is,  the 
person,  to  whom  a  summons  is  issued  under 
section  8B  is  in  a  position  of  an  accused 
person ;  and,  therefore,  cannot  be  subjected 
to  cross-examination. 

Objections  were  also  raised  on  a  number  of  subsidiary 
matters,  inter  alia, — . 

(a)  that  the  terms  of  reference  of  the  Commission 
are  vague ; 

(b.)  that  the  Commission  has  no  power  to  inquire 
into  the  circumstances,  which  preceded  the 
declaration  of  Emergency  and  the  manner  in 
which  the  advice  for  the  declaration  of 
Emergency  was  given ; 

(c)  that  the  transactions,  which  commenced  after 
.Time  25,  1975,  or  shortly  before  that  may  be 
inquired  into,  but  no  transaction,  which  com- 
menced at  a  point  of  time  appreciably  longer 
than  a  few  days  prior  to  June  25th,  1975, 
can  be  inquired  into  ; 


'■'  s?-ff9MWl 


:■,' .  L3.Y.-.1-."-    '■■ 


11 


:  .'(d)  that  no  opportunity  to  note  the. demeanour 
of  the  witness,  who  had  already  been  examin- 
ed by  the  Commission  was  given  to  persons 
to  whom  summonses  under  section  8B  were 
issued  and,  therefore,  the  proceedings  would' 
.     be  regarded  as.vitiated  ;  and 

(e)  that  since  under  the  Commissions  of  Inquiry 
Act  that  failure  to  tell  the  truth  before  the 
investigating  officer  or  making  a  statement 
inconsistent  with,  a  statement  made  before 
the  investigating  officer  is  liable  to  be  made 
the  subject  matter  of  a  prosecution  for  per- 
jury, _  the  investigating  officers  must  be 
examined  by  the  Commission  or  be  brought 
before  the  Commission,  so  that  the  person  to 
whom  a  summons  is  issued  under  section  8B 
is  entitled  to  cross-examine  those  investigating 
officers. 

.  3.10A  In  dealing  with  these  objections  the  Commis- 
sion observed  that  the  proceedings  before  the 
Commission  are  taken  under  the  terms  of  reference  for 
determining  the  truth  in  respect  of  certain  transactions 
.  or  certain  matters,  set  out  in  the  terms  of  reference. 
The  proceedings,  therefore,  cannot  assume  the  form 
of  a  proceeding  of  a  civil  trial  nor  of  a  criminal  trial, 
where  some  person  is  accused  of  the  commission  of 
a'n  offence.     It  was  also  observed  : 

It  is  necessary  to  emphasise  this  fact  because  the 
argument  persistently  advanced  before  me  by  Counsel 
for  Smt.  Gandhi  was  that  the  proceedings  before  the 
Commission  must,  be,  if  not  actually  assimilated,  made 
similar  to  a  proceeding  relating  to  a  criminal  trial ;  and 
in  support  of  that  contention,  the  argument  was  pri- 
marily based  upon  the  terms  of  section  SB  of  the  Act. 
It  may  be  pointed  out  that  the  proceedings  before  a 
Commission  of  Inquiry  disclose  characterists  sub- 
stantially different  from  a  trial  of  a  suit  or  a  criminal 
prosecution.  From  the  very  nature  of  the  proceedings, 
it  will  not  be  an  adversary  proceedings,  i.e.  where 
there  is  either  a  plaintiff  or  defendant  or  a  prosecutor 
and  an  accused  person,  but  the  proceedings  will  be  of 
the  nature  of  'inquisitorial',  When  I  say  'inquisitorial', 
it  must  be  shorn  of  all  the  sinister  aura  the  expression 
'inquisitorial'  has  acquired  because  of  association  in 
certain  foreign  countries  where  inquisitions  were  held 
under  circumstances  as  a  part  of  religious  persecution. 
(When  I  say  'inquisitorial',  it  means  that  the  presiding 
officer  takes  upon  himself  the  duty  to  ascertain  the 
facts  through  witnesses  after  giving  opportunity  to  per- 
sons concerned,  who  may  be  affected  by  the  determina- 
tion of  facts.)  Whether  the  inquisitorial  method  is 
better  in  an  academic  sense,  than  the  adversary  method 
is  not  a  matter  with  which  I  am  concerned.  The  Act 
has  adopted  the  inquisitorial  method.  Qri  that!  can 
do  np  belter  than  cite  what  Lord  Justice  Salmon  said 
in  his  report  on  the  Royal  Commission  on  Tribunals  of 
Inquiry,  1966  : 

"27.  The  exceptional  inquisitorial  powers  con- 
ferred upon  a  Tribunal  of  Inquiry  under  the 
Act  of  1921  necessarily  exposes  the  ordinary 
citizen  to  the.  risk  of  having  aspects  of  his 
private  life,  uncovered  which  should  other- 


wise remain  private  and  to  the  risk  of  having 
baseless  allegations  made  against  him.  This 
may  cause  distress  and  injury  to  reputation. 
For  these  reasons,  we  are  strongly  of  the 
opinion  that  the  inquisitorial  machinery  set 
up  under  the  Act  of  1921  should  never  be 
used  for  matters  of  local  or  minor  public 
importance,  but  always  be  confined  to  matters 
of  vital  public  importance  concerning  which 
there  is  something  in  the  nature  of  nation- 
wide crisis  of  confidence.  In  such  cases,  we 
considered  that  no  other  method  of  investi- 
gation would  be  adequate." 

"28.  Normally  persons  cannot  be  brought  before 
..  a  Tribunal  and  questioned  save  in  civil  or 
criminal  proceedings.  Such  proceedings  are 
hedged  around  by  long-standing  and  effective 
safeguards  to  protect  the  individual.  The 
inquisitorial  procedure  is  alien  to  the  concept 
of  justice  generally  accepted  in  the  United 
Kingdom.  There  are,  however,  exceptional 
cases  in  which  such  procedure  must  be  used 
to  preserve  the  purity  and  integrity  of  our 
public  life,  without  which  a  successful  demo- 
cracy is  impossible.  It  is  essential  that  on 
the  very  rare  occasions  when  crises  of  public 
confidence  occur  evil  if  it  exists  shall  be 
exposed  so  that  it  may  be  rooted  out  or  if  it 
does  not  exist,  the  public  shall  be  satisfied 
that  in  reality  there  is  no  substance  in  the 
prevalent  rumours  and  suspicions  by  which 
..<-...-  they  have  been  disturbed.  We  are  satisfied 
that  this  would  be  difficult,  if  not  impossible, 
without  public  investigation  by  an  inquisi- 
torial Tribunal  possessing  the  powers  con- 
ferred by  the  Act  of  1921.  Such  a  Tribunal 
is  appointed  by  Parliament  to  enquire  and 
report." 

"30.  There  are  important  distinctions  between  in- 
quisitorial procedure  and  the  procedure  in 
an  ordinary  civil  or  criminal  case.  It  is  in- 
herent in  the  inquisitorial  procedure  that 
there  is  no  lis.  The  tribunal  directs  the  en- 
quiry and  the  witnesses  are  necessarily  the 
tribunal's  witnesses.  There  is  no  plaintiff  or 
defendant,  no  prosecutor  or  accused;  there 
are  no  pleadings  defining  issues  to  be  tried, 
no  charges,  indictments  or  depositions.  The 
inquiry  may  take  a  fresh  turn  at  any  moment. 
It  is,  therefore,  difficult  for  persons  involved 
to  know  in  advance  of  the  hearing  what 
allegations  may  be  made  against  them." 

3.11  After  setting  out  the  terms  of  reference,  it  was 
observed  that  the  Commission  had  the  power  under 
section  8  of  the  Commissions  of  Inquiry  Act  and  was 
obliged  to  devise  a  procedure,  which  would  be  fair  to 
every  one  concerned  and  within  which  the  Commission 
would  effectively  perform  the  duties  entrusted  to  it  to 
hold  the  inquiry.  For  that  purpose,  it  was  considered 
necessary  to  have  investigation  made  by  the  investiga- 
ting staff  of  the  Commission.  In  the  very  nature  of 
things,  such  investigation  could  not  be  complete.  It 
was,    therefore,    thought    necessary    to    ask    persons 


12 


cognisant  of  the  transactions  to  'appear  before  the 
Commission  to  assist  the  Commission  in  making  the 
inquiry.  It  was  then  made  clear  that  there  was  no 
compulsion  upon  anyone  to  come  before  the  Commis- 
sion. It  was  only  a  request  to  assist  the  Commission 
in  the  due  performance  of  its  duties. 

3.12  After  setting  out  the  terms  of  rule  5,  it  was 
observed  that  it  was  obligatory  upon  the  Commission 
to  issue  a  notice,  both  under  clause  2(a)  of  rule  5  aud 
notification  under  clause  2(b).  A  notification  was 
issued  generally  inviting  the  public  to  make  complaints 
under  clause  2(b).  But  rule  5(2)  (a)  could  not  be 
complied  with  at  that  stage  because  under  the  terms 
of  reference,  the  Commission  could  not  without  adding 
a  preliminary  inquiry  ascertain  the  persons,  who  may 
be  given  an  opportunity  of  being  heard  in  the  inquiry 
under  rule  5(2)  (a) .  The  Commission  was  called  upon 
to  make  an  inquiry  into  certain  matters,  but  without 
indicating  the  involvement  of  any  named  persons.  It 
was,  therefore,  necessary  for  the  Commission  to  identify 
the  persons  to  whom  notice  must  be  given.  It  was  also 
necessary  in  order  to  maintain  some  regulation  and 
control  over  the  proceedings,  before  the  Commission 
was,  prima  facie,  satisfied,  whether  there  had  or  had 
hot  been  committed  an  excess,  following  the  terms  of 
reference.  For  that  purpose  letters  of  request  were 
sent  to  various  persons  to  come  before  the  Commission, 
whose  names  appeared  to  have  been  disclosed  on  the 
investigations  made  by  the  officers.  After  holding  this 
inquiry  and  perusing  the  statements  made  before  the 
investigating  staff,  it  was  thought  necessary,  when  it 
appeared  that  the  Commission  could  form  an  opinion 
that  certain  persons  should  be  given  an  opportunity 
of  being  heard  in  the  inquiry,  and  notices  under  rule 
5(2) (a)  were  given.  The  Commission  was  also  satis- 
fied that  if  inquiry  is  held,  which  it  was  directed  to 
make  in  regard  to  the  five  items,  the  holding  of  the 
inquiry  may.  affect  the  reputation  of  certain  persons, 
or  that  it  would  be  necessary  to  investigate  into  fthe 
conduct  of  those  or  certain  other  persons.  The  Com- 
mission, accordingly,  directed  that  summonses  be  issued 
under  section  8B  of  the  Act.  Thereupon,  notices  under 
rule  5(2) (a)  and  summonses  under  section  SB  were 
issued  by  the  Commission,  Pursuant  to  these  notices 
under  rule  5(2)  (a)  some  persons  filed  their  statements, 
while  others  did  not. 

.  3.13  Referring  to  the  contentions  that  notice  under 
rule  5(2)  (a)  was  not  issued  "as  soon  as  may  be" 
after  the  appointment  of  the  Commission,  the  Com- 
mission observed  that  an  earlier  stage  for  issuing  the 
notice  against  any  person,  who  in  the  opinion  of  the 
Commission,  should  be*  given  an  opportunity  of  being 
heard  in  the  inquiry,  could  not  be  conceived  of  unless 
that  person  was  identified.  It  was  for  that  reason  that 
the  preliminary  inquiry  was  held  to  identify  the  person, 
who,  in  the  opinion  of  the  Commission,  should  be 
given  an  opportunity  of  being  heard.  The  Commission 
gave  them  opportunity  to  furnish  statements  relating 
to  such  matters  by  issuing  notices  under  rule  5 (2) (a). 
The  Commission  pointed  out  that  rule  5(2)  (a)  makes 
it  obligatorv  for  the  Commission  to  issue  the  notice 
■  to  everv  perso'n,  who,  in  the  opinion  of  the  Commission, 
should  be  given  an  opportunity  of  being  heard  in  the 
inquiry  to  furnish  to  the  Commission  a  statement  relat- 
ing to  such  matters,  as  may  be  specified  in  the  notice. 


The  Commission  has  no  power  to  dispense  with  the 
issue  of  the  notice  and  the  submission  of  the  counsel 
to  dispense  with  the  notice  could  not  be 
acceded  to.  ■  The  notices,  in  fact,  had  been 
issued,  requiring  the  persons  to  whom  they 
were  issued,  to  file  their  version  and  statement  of 
facts  in  support  of  the  version  set  out  in  their  state- 
ments. They  were  also  required  to  file  lists  of  docu- 
ments oil  which  those  persons  relied  and  to  forward 
to  the  Commission  those  documents.  This  was  the 
stage  at  which  the  person,  who  in  the  opinion  of  the 
Commission  was  required  to  furn;.sh_  a  statement  rela- 
ting to  the  matters  specified  in  the  notice,  was  identified. 
At  no  earlier  stage  could  such  notice  be  given.  Under 
the  provisions  of  the  Act,  the  next  stage  of  holding 
an  inquiry  on  the  statements  filed  bs'fore  the  Commis- 
sion commences  thereafter.  At  the  earlier  stage,  wit- 
nesses would  be  examined— all  would  be  witnesses  for 
the  Commission.  If,  however,  it  appeared  to  the  Com- 
mission that  it  was  necessary  to  inquire  into  the  conduct 
of  any  person,  or  in  the  opinion  of  the  Commission 
the  reputation  of  any  person  was  likely  to  be  prejudi- 
cially affected  by  the  inquiry,  the  Act  made  it  obligatory 
that  summons  under  section  SB  shall  be  issued.    , 

3.14  Therefore,  the  Commission  observed  that 
there  was  no  warrant-  for  the  view  that  once  a  notice 
under  section  SB  is  issued,  there  is  no  obligation  on  the 
part  of  the  Commission  to  issue  a  notice  under  rule 
5(2)  (a),  nor  that  the  issuance  of  the  notice  under. 
5(2)  (a)  is  dispensed  with,  when  a  summons  under 
section  SB  is  issued.  It  was  observed  : 

"Rule  5(2) (a)  and  section  8  operate  in  different 
..:  ■  fields.  Rule  5(2)  (a)  deals  with  a  demand 
from  the  Commission,  in  what  may  be  loosely 
called  "pleading  of  the  perso'n  to  whom  the 
notice  is  issued".  Persons  who,  in  the  opinion 
of  the  Commission,  should  be  called  upon  to 
have  on  that  account  an  opportunity  of 
explaining  certain  matters,  which  have  come 
to  the  notice  of  the  Commission  at  that  stage. 
The  person  to  whom  a  notice  has  been  issued, 
is  required  to  come  and  submit  his  statement 
in  regard  to  what  his  version  of  the  matters 
specified  in  the  notice  is.  It  is  after  the 
statement  is  filed,  the  inquiry  commences  and 
it  is  in  the  course  of  the  inquiry  that  the 
notice  under  section  8B  will,  if  at  all,  be 
issued.  In  order,  however,  that  time  may 
not  be  wasted, 


it  was  found  necessary  by  me  to  issue  a  notice 
under  rule  5(2)  (a)  and  also  because  it 
appeared  to  me  (Commission)  from  mate- 
rials disclosed  in  the  evidence  at  the  stage  Of 
the  inquiry  collected  by  the  investigating 
officers  and,  further,  on  the  preliminary  in- 
quiry held  by  me  (Commission)  that  it  will 
be  necessary  to  inquire  into  the' conduct  of 
certain  persons  and  also  that  the  reputation 


;\::;;i!::\'.-L.:v;..:iV 


13, 


of  certain  persons  was  likely  to  be  prejudi- 
cially affected  by  the  inquiry.  On  that 
account  this  summons  under  section  8B  was 
issued." 

3.15  The  Commission  rejected  the  contention  of  the 
counsel  for  Smt.  Indira  Gandhi  that  once  a  summons 
under  section  8B  is  issued  by  the  Commission,  there 
can  be  no  scope  for  issuing  a  notice  under  rule 
5 (2) (a),  or  that  the  proceedings  before  the  Commis- 
sion are  either  of  the  nature  of  a  criminal  inquiry  or 
quasi  criminal  inquiry  or  that  the  inquiry  is  in  the 
nature  of  a  criminal  proceedings. 

3.16  It  was  also  emphasised  that  the  proceedings 
before  the  Commission  are  Hor  determining  the  truth 
in  the  manner  provided  by  the  Act  in  respect  of 
matters  of  public  interest  specified  in  the  terms  of 
reference.  They  are  not  civil  proceedings,  nor  are  they 
criminal  proceedings.  They  are  not  adversary  proceed- 
ings. They  are  proceedings  in  *  which  truth  has 
to.  be  determined  by  the  adoption  of  a  pro- 
cedure to  be  devised  by  the  Commission  having  regard 
to  the  nature  of  the  inquiry  and  which  is  essentially 
inquisitorial  in  character,  as  prescribed  by  the  Act. 

.  3.17  The  Commission  also  rejected  the  contention 
raised  by  the  counsel  that  it  was  obligatory  -upon  the 
Commission  to  issue  a  notice  under  rule  5(2)  fa)  as 
.soon  as  it  appeared  from  any  statement  made  before 
the  investigating  officer  that  some  persons  were  con- 
cerned in  the  commission  of  any  excess  specified  in  the 
terms  of  reference  and  if  the  notice  was  not  issued 
Soon  thereafter,-  such  a  notice  could  not  be  issued  at 
all, 

3.18  The  Commission  also  rejected  the  contention 
urged  in  the  alternative  that  the  appropriate  procedure 
should  have  been  that  as  soon  as  a  witness  appeared 
before  the  Commission  at  the  stage  of  the  preliminary 
hearing  and  made  some  statement  which  involved  a 
person  in  the  commission  of  some  impropriety,  the 
Commission  was  bound  to  issue  a  summons  under  sec- 
tion SB  and  that  the  Commission  had  no'  option  to 
act  otherwise.  It  was  observed  that  on  the  terms  of 
section  8B  if  the  Commission  at  any  stage  of  the 
inquiry  either  deems  it  necessary  to  inquire-  into  the 
conduct  of  any  person  or  the  Commission  is  ofopinion 
that  reputation  of  any  person  is  likely  to  be  pre- 
i  judicially  affected  by  "the  inquiry,  notice  under  that 
section  must  be  issued.  But  until  the  Commission 
entertains,  on  materials  placed  before  it,  an  opinion 
after  consideration  of  the  materials,  there  can  be  no 
scope  for  issuing  summons  under  section  8B.  Section 
SB  requires  that  the  Commission  must  consider  it 
necessary  to  inqmre  into  the  conduct -of  any  person  ; 
and  merely  because  some  statement  is  made  before 
the  Commission  involving  directly  or  indirectly  any 
person  in  the  commission  of  an  excess,  without  examin- 
ing whether  the  statement  in  the  light  of  the  rest  of  the 
evidence  and  circumstances  is  reliable,  or  whether 
such  a  statement  can  be  acted  upon,  it  would  be 
impossible  and,  in  anv  event,  improper  for  the  Com- 
mission to  issut  a  summons  under  section  8B,  merely 
because  some  statement  was  made  by  some  one 
attributing  impropriety  to  another  person. 
S/39  HA/77— 3 


3.19  The  contention  raised  by  the  counsel  that  the 
person  to  whom  a  notice  under  rule  5(2)  (a)  or  a 
summons  under  section  8B  is  issued,  cannot  be  called 
upon  to  disclose  his  version  of  the  incidents,  which 
form  the  subject  matter  of  inquiry,  because  when  a 
serious  allegation  is  made,  which  affects  the  reputation 
of  a  person,  the  proceeding  from  that  statement  as- 
sumes the  form  of  a  criminal  trial  or  a  proceeding 
similar  to  or  analogous  to  a  criminal  trial  and  that  the 
difference  between  the  proceedings  under  section  8B 
and  a  criminal  proceeding  would  be  minimal,  was  also 
rejected. 

3.20  Referring  to  the  contention  urged  by  the 
counsel  that  the  person  to  whom  a  notice  is  issued 
under  rule  5  (2)  (a)  cannot  be  called  upon  to  disclose 
his  version  of  the  incidents  referred  to  in  the  notice, 
because  that  would  amount  to  "pre-empting  the 
defence"  of  that  person,  it  was  pointed  out  that  the 
contention  is  based  upon  a  misconception  of  the  true 
nature  of  the  proceedings  and  the  express  provisions 
made  in  the  Rules,  which  are  part  of  the  Act.  Under 
rule  5(2)  (a)  the  Commission  is  under  a  statutory  obli- 
gation to  call  upon  .persons,  who  in  the  opinion  of  the 
Commission  should  be  given  an  opportunity  of  being 
heard,  to  furnish  to  the  Commission  a  statement  relat- 
ing to  such  matters  as  may  be  specified  in  the  Uotice ; 
and  obviously  it  could  not  mean  that  even  though  a 
person  is  given  an  opportunity  of  being  heard  in  an 
inquiry,  he  should  not  be  called  upon  to  furnish  to  the 
Commission  a  statement  relating  to  the  matters  as  may 
be  specified  in  the  notice.  Under  the  Act  opportunity 
must  be  given  in  those  cases  in  which  there  is  some- 
thing to  be  investigated  into  or  inquired  into  a  finding 
on  which  might  be  prejudicial  to  the  conduct  of  the 
person  to  whom  notice  has  been  issued. 

.3.21  The  Commission  pointed  out  that  rule  5(3) 
expressly  provides  that  the  disclosure  shall  be  made 
on  affidavit  in  support  of  the  facts  stated  in  the  state- 
ment sworn  by  the  person  furnishing  the  same. 

3.22  It  was  contended  that  by  calling  upon  a  person 
to  file  a  statement  under  rule  5  (2)  (a)  disclosing  his 
version  as  regards  certain  incidents,  there  is  pre-emp- 
ting of  the  defence  because  that  person  is  called  upon 
to  make  a  statement  in  an  inquiry  before  the  Com- 
mission :  it  was  emphasised  that  the  Commission  has 
to  ascertain  the  facts  and  in  ascertaining  those  facts 
assistance  of  persons,  who  should  be  given  opportunity 
of  being  heard  is  asked  for,  and  the  persons,  who  are 
given  opportunity  should  make  statements  ofi  oath 
and  also  produce  documentary  evidence  on  which  they 
rely ;  accordingly,  therefore  the  contention  was 
rejected. 

3.23  The  Commission  also  rejected  the  contention 
raised  by  counsel  for  Smt.  Gandhi  that  a  person  to 
whom  a  summons  is  issued  under  section  8B  cannot 
be  cross-examined,  since  section  8C  contemplates 
cross-examination  of  witnesses  only  and  a  person  who 
deposes  to  the  involvement  of  the  person  against  whom 
an  inquiry  is  being-  made  and  not  of  a  person  against 
whom  or  in  whose  conduct  an  inquiry  is  being  made. 


14 


This  argument  was  sought  to  be  supported  on  three 
grpunds  : 

(i)    under  rule  5(2) (a)  every  person  notwith- 
standing   the  amplitude    o'f  the    expression 
used  therein  still  excluded  persons  against' 
whom  some  allegation  of  impropriety  was 
made; 

(ii)  the  terms  of  section  8B,  referred  to  a  defence 
to  be  made  by  a  person  whose  conduct  was 
being  inquired  into  or  the  reputation  of  that 
person  was  likely  to  be  prejudicially  affected  ; 
and 

(iii)  in  terms  of  section  8C  the  right  of  cross- 
examination  is  conferred  upon  certain  persons 
and  by  implication  it  means  that  the  person 
whose  conduct  is  being  inquired  into,  is  not 
a  person  who  can  be  cross-examined. 

3.24  The  Commission  rejected  these  contentions 
and  observed  that  section  SB  confers  the 
basic  protection  to  any  person  that  he  shall  not  be 
condemned  unheard  by  the  Commission,  i.e.  his  con- 
duct should  not  be  adversely  commented  upon  by 
reaching  a  finding  that  his  version  is  "not  true,  without 
giving  him  an  opportunity  of  being  heard.  The  finding 
may  be  of  impropriety  or  of  an  act  which  may  amount 
to  an  offence  or  anything  which  might  bring  him  into 
disrepute.  If  the  Commission  ..thinks  it  necessary  to 
inquire  into  the  conduct  of  such  a  person,  it  is  necessary 
to  give  a  notice  under  section  8B  and  that  such  a  person 
would  obviously  be  a  person  against  whom  there  is  an 
allegation  made  by  someone.  Similarly,  it  would  be 
necessary  to  issue  a  summons  to  the  person,  who  in  the 
opinion  of  the  Commission  is  likely  to  be  prejudicially 
affected  by  the  holding  of  the  inquiry.  It  was  pointed 
out  that  section  8C  defines  the  contours  of  a  reasonable 
opportunity  of  being  heard  in  the  course  of  the  inquiry. 
Reasonable  opportunity  of  being  heard  is  not  merely 
of  making  an  oral  representation  or  denying  what  h 
alleged  but  including  right  to  appear  by  counsel,  and 
to  cross-examine  witnesses  who  depose  against  him 
and  to  lead  evidence  to  rebut  that  evidence  and  to 
address  the  Commission.  That,  however,  does  not 
mean  that  when  the  Commission  is  holding  an  inquiry 
into  the  conduct  of  any  person,  such  a  person  is 
immune  from  cross-examination.  The  procedure, 
which  the  counsel  suggested  should  be  followed  is 
that  once  a  summons  is  issued  under  section  8B,  there 
is  no  scope  for  the  issue  of  notice  under  rule  5  (2)  (a)  ; 
and  all  the  witnesses  on  behalf  of  the  person  who  have 
either  made  a  complaint  or  whether  there  was  no  com- 
plaint, where  a  reference  has  been  made  on  behalf  of 
the  Commission  should  be  examined,  should  be  allowed 
to  be  cross-examined  by  the  person  whose  conduct  is 
under  investigation  and  thereafter  such  a  person  may 
be  examined  by  the  Commission  but  not  by  counsel 
appearing  for  other  persons,  or  even  bv  counsel  for 
the  Union  or  by  counsel  for  the  Commission. 

3.25  It  was  observed  that  ('here  is  nothing  either 
in  the  Rules  nor  in  the  Act,  which  supports  the 
contention.  There  is  not  even  an  indication  that  such 
a  procedure  is  intended  to  be  followed,  unless  it  is 
assumed  that  when  conduct  is  attributed  to  a  person 


which  may  ultimately  result  in  some  action  to  be 
taken  for  impropriety,  if  the  finding  of  tiie!  Coiumis- 
sion  is  accepted,  the  proceedings  before  the  Com- 
mission itself  assume  the  form  of  a  criminal  trial.  For 
such  an  assumption,  there  is  no  warrant. 

3.26  It  was  pointed  out  that  the  procedure  has  to 
be  devised  by  the  Commission  in  each  case  having 
regard  to  the  nature  of  the  inquiry  to  be  made;  and 
rarely  there  would  be  any  two  Commissions,  which 
would  follow  the  same  procedure.  There  may  be. a 
case,  where  no  person  may  be  involved  directly  or 
indirectly;  but  only  certain  matters  are  to  be  investi- 
gated by  the  Commission.  There  may  be  cases  in 
which  no  person  may  be  named  as  responsible  for, 
any  impropriety  and  such  persons  may  have  to  be 
identified  and  their  involvement  in  the  impropriety 
determined;  there  may  be  other  cases  in  which  the 
person  alleged  to  be  responsible  for  improper  conduct 
may  be  named.  In  each  such  case  the  procedure 
would  be  different  and  the  Commission  has  to  devise 
a  procedure,  subject  to  the  Rules  and  affording  pro- 
tection or  safeguards  provided  by  the  statute  to  the 
persons  against  whom  inquiry  may  have  to  be  made. 
It  was  also  observed  that  section  8C  has  no  indepen- 
dent existence  :  it  merely  gives  content  to  the  right  of 
being  heard,  as  given  by  section  8B.  Section  8C 
is  not  intended  to  restrict  the  scope  of  the  inquiry 
which  has  to  be  made  by  the  Commission  or  to  attri- 
bute to  the  inquiry  a  form  different  from  the  normal 
form  of  an  inquisitorial  proceeding. 

3.27  The  Commission  is  obliged  to  devise  a  proce- 
dure under  section  8  of  the.  Act  having  regard  to  the 
nature  of  the  inquiry  to  be  made.  The  procedure, 
however,  has  to  be  subject  to  the  Rules,  which  may 
be  made  by  the  Commission  in  that  behalf.  .The 
Commission  is  entitled,  however,  to  regulate  its  pro- 
cedure subject  to  the  basic  safeguards  provided  in 
sections  8B  and  8C.  The  Commission  has  also  to 
issue,  as  soon  as  may  be,  a  notice  to  every  person, 
who,  in  the  opinion  of  the  Commission  should  be  given 
an  opportunity  of  being  heard  in  the  inquiry  to  furnish 

'  to  the  Commission  a  statement  relating  to  such  matters 
as  may  be  specified  in  the  notice  and  that  such  person 
should  be  required  to  submit  sueji  a  statement  under 
clause  (3)  of  rule  5  by  an  affidavit  in  support  of  the 
facts  set  out  in  the  statement  sworn  by  the  person 
furnishing  the  statement.  Apart  from  that  the  Com- 
mission has  the  additional  power  of  calling  upon  any 
person  to  furnish  information  on  such  points  or 
matters  as,  in  the  opinion  of  the  Commission,  may 
be  useful  for  or  relevant  to  the  subject  matter .  of  the 
inquiry  and  the  person,  so  required,  is  legally  bound 
to  furnish  such  information. 

3.28  The  proceedings  of  the  Commission  are  not 
analogous  to  proceedings  in  a  civil  trial  or  enforcement . 
of  a  civil  right  or  obtaining  relief  for  infringement  of 
a  civil  right,  nor  of  a  criminal  trial  in  which  the 
conduct  of  a  person  or  persons  for  the  commission 
or  infraction  of  the  law  is  sought  to  be  investigated. 
The  function  of  the  Commission  is  to  determine  facts 
relating  to  matters  of  public  importance  and  by  adop- 
tion of  a  procedure,  which  is  not  adversary  in  charac- 
ter, but  inquisitorial  in  character. 


15 


3.29  Under  section  5  of  the  Commissions  of  In- 
quiry Act,  the  Commission  may  be  invested  with 
additional  powers  which  are  set  out  in  that  section. 
By  section  5(2)  the  Commission  has  the  power  to 
require  any  person  subject  to  any  privilege,  which 
may  be  claimed  by  that  person  under  any  law  for 
the  time  being  in  force,  to  furnish  information  on 
such  points  or  matters,  as  in  the  opinion  of  the  Com- 
mission, may  be  useful  for,  or  relevant  to,  the  subject 
matter  of  the  inquiry  and  any  person,  so'  required, 
shah  be  deemed  to  be  legally  bound  to  furnish  such 
information  within  the  meaning  of  section  176  and 

;  section  177  of  the  Indian  Penal  Code. 

3.30  One  objection,  which  was  ■strenuously  urged 
before  the  Commission  by  counsel  appearing  for  Smt. 
Indira  Gandhi  in  the  proceedings  before  tiie  Commis- 
sion was  that  in  view  of  the  oath  of  secrecy  taken 
by  a  Minister  entering  upon  his  office  under  clause  (4  j 
of  Article  75,  according  to  the  forms  set  out  in  the 
III  Schedule  to  the  Constitution  and  on  that  account 
Smt.  Gandhi  was  unable  to  disclose  any  information 
relating  to  the  matters  of  the  State  which  she  dealt 
with  in  the  course  of  her  functioning  as  the  Prime 
Minister  of  India  till  she  relegated  that  office.  Article 
75,.  clause  (1),  provides  that  the  Prime  Minister  shall 
be  appointed  by  the  President  and  the  other  Ministers 
also  shall  be  appointed  by  the  President  on  the  advice 
of  the  Prime  Minister.  Clause  (4)  provides  that 
before  a  Minister  enters  upon  his  office,  the  President 
shall  administer  to  him  the  oaths  of  office  and  of 
secrecy,  according  to  the  forms  set  out  for  the  purpose 
in  the  Third  Schedule.  The  forms  of  oath  of  office, 
as  set  out  in  the  Third  Schedule  are  as  follows  : — 

.-..  "I,'  A.  B.  C,  do  swear  *  *  * 

'  ;f"  that   I,  will  bear  true   faith   and    allegiance 

to  the  Constitution  of  India,  as  by  law 
established,  that  I  will  uphold  the  sove- 
reignty and  integrity  of  India,  that  I  will 


faithfully  and  conscientiously  discharge  my 
duties  as  a  Minister  for  the  Unipn  and  that 
I  will  do  right  to  all  manner  of  people  in 
accordance  with  the  Constitution  and  the 
law,  without  fear  or  favour,  affection  or  HI 
will." 


The  form  of  oath  of  secrecy  for  a  Minister  for  the 
Union  is  as  follows  : — 

"I,  As... do  swear  *        *         * 

that  I  will  not  directly  or  indirectly  com- 
municate or  reveal  to  any  person  or  persons 
any  matter,  which  shall  be  brought  under 
my  consideration  or  shall  become  known 
to  me  as  a  Minister  for  the  Union  except/ as 
may  be  required  for  the  due  discharge  of 
my  duties  as  such  Minister." 

3.31  The  Commission  had  ruled  that  the  oath  of 
secrecy  of  office  taken  by  a  Minister  of  the  Union 
does  not  prohibit  a  Minister  from  disclosing  the  infor- 
mation before  a  Commission  of  Inquiry  especially 
when  the  Central  Government  has  directed  the  holding 
of  an  Inquiry  for  the  purpose  of  ascertaining  facts 
relating  to  matters  of  public  interest.  The  Constitution 
requires  that  the  Minister  shall  take  an  oath  of  office 
but  does  not  provide  for  any  penalty  for  breach  of 
such  oath.  Again,  the  obligation  is  not  absolute  but 
is  subject  to  the  communication  being  made  or  the 
information  being  revealed,  as  may  be  required  in 
the  due  discharge  of  the  duties  as  such  Minister.  In 
the  view  of  the  Commission,  the  disclosure  of  infor- 
mation before  a  Commission  of  Inquiry  held  in. 
pursuance  to  a  direction  of  the  Central  Government 
after  a  person  has  ceased  to  be  a  Minister,  d.oes  not 
amount  to  a  breach  of  the  oath  of  secrecy  of  the 
Minister  concerned. 


tsas 


CHAPTER  IV 


4.1  The  terms  of  reference  to  the  Commission  are 
divided  into  five  heads  :  The  Commission  is  directed 
to  inquire  into  the  facts  and  circumstances  relating  to 
specific  instances  consisting  ■  of — 

(i)  subversion  of  lawful  processes  and  well- 
established  conventions,  administrative  pro- 
cedures and  practices,  abuse  of  authority, 
misuse  of  power,  excesses  and/or  mal- 
practices committed  during  the  period  when 
the  Proclamation  of  Emergency  made  on 
June  25,  1975  under  Article  352  of  the 
Constitution  was  in  force  or  in  days  imme- 
diately preceding  the  said  Proclamation; 

(U)  misuse  of  power  of  arrests  or  issue  of  deten- 
tion orders  where  such  arrests  or  orders  are 
alleged  to  have  been  made  on  considerations 
not  germane  to  the  purposes  of  the  relevant 
Acts  during  the  aforesaid  period; 

(iii)  specific  instances  of  maltreatment  of  and/or 
atrocities  on  persons  arrested  under  DISIR. 
or  detained  and  their  relatives  and  close 
associates  during  the  aforesaid  period; 

(iv)  specific  instances  of  compulsion  and  use  of 
force  in  the  implementation  of  the  family 
planning  programme  during  the  aforesaid 
period; 

(v)  indiscriminate,  high-handed  or  unauthorised 
demolition, of  houses,  huts,  shops,  buildings, 
structures  and  destruction  of  property  in  the 
name  of  slum  clearance  or  enforcement  of 
Town  Planning  or  land  use  schemes,  during 
the  aforesaid  period. 


4.2  The  inquiry  is  directed  into  specific  instances 
of  excesses  or  malpractices  committed  during  the 
aforesaid  period.  The  inquiry  is  further  directed  to  ex- 
cesses of  powers  of  arrests  or  issue  of  detention  orders; 


maltreatment  of  and/or  atrocities  on  persons  arrested 
under  the  Preventive  Detention  procedures;  use  of 
force  in  the  implementation  of  the  Family  Planning 
Programme  and  indiscriminate,  high-handed  or  un- 
authorised demolition  of  houses,  shops  and  structures. 

4.3  If  the  primary  activity  disclosed  in  a  particular 
case  falls  under  a  particular  head,  it  will  be  dealt  with 
under  that  head  regardless  of  the  fact  that  the  case 
discloses  some  other  activities  like  subversion  of  law- 
ful process  or  conventions,  disregard  of  administrative 
procedures  or  abuse  of  authority.  For  example,  where 
the  excess  committed  relates  to  the  issue  of  a  detention 
order,  despite  the  fact  that  the  excess  may  have  beeri 
committed  by  ignoring  the  established  conventions  and 
by  abuse  of  authority,  the  case  will  be  dealt  with  under 
the  head  "misuse  of  powers  of  arrests  or  issue  ol 
detention  orders".  Similarly,  where  the  specific  excess 
committed  relates  to  the  use  of  force  in  the  implemen- 
tation of  the  family  planning  programme,  even  if  it 
appears  that  it  was  by  "abuse  of  authority"  or  "misuse 
of  power",  it  will  be  dealt  with  under  the  head 
"Compulsion  and  use  of  force  in  the  implementation 
of  the  family  planning  programme".  Similarly,  where 
there  has  been  indiscriminate,  high-handed  or  unautho- 
rised demolition  of  houses  and  structures  by  the  abuse 
of  authority  or  misuse  of  power,  it  will  be  dealt  with 
under  the  head  "Unauthorised  demolition  of  houses, 
huts,  etc." 

4.4  Out  of  a  number  of  cases  which  came  to  its 
notice  by  virtue  of  the  complaints  made  to  it  or  on 
the  basis  of  the  information  developed  by  the  Com- 
mission,, the  Commission  took  up  for  open  hearing 
only  those  cases  in  which  it  appeared  that  there  had 
been  a  blatant  abuse  of  authority  or  misuse  of  powers 
'relating  to  instances  falling  under  one  of  the  five  heads 
of  the  terms  of  reference.  In  this  regard  one  general 
principle  which  has  been  kept  in  mind  is  that  the 
excess  complained  of  must  be  of  a  nature  which  would 
be  capable  of  creating  a  crisis  of  confidence  or  which 
is  one  of  national  importance. 


16 


■  ■■  ■■.■-  ■ :.  ■■  ./s     w'-'.m^ii 


■   ..  .  - &  iiii  m 


CHAPTER  V 


In  the  Elections  held  to  the  Lok  Sabha  in  1971  from 
the  Rai  Bareily  Consituency  Smt.  Indira  Gandhi  was 
"declared  elected,  defeating  Shri  Raj  Narain  and  others 
who  had  contested  the  election.  Shri  Raj  Narain  then 
filed  a  petition  in  the  High  Court  of  Allahabad  chal- 
lenging the  election  of  Smt.  Indira  Nehru  Gandhi  on 
a  number  of  grounds,  inter  alia,  alleging  misconduct 
against  her.  The  High  Court  of  Allahabad  pronounc- 
ed its  judgment  on  June  12,  1975.  Shri  J.  M.  L.  Sinha 
of  Allahabad  High  Court  ordered  : 

"In  view  of  my  findings this  petition  is 

allowed  and  the  election  of  Smt.  Indira 
Nehru  Gandhi  respondent  No.  1  to  the  Lok 
Sabha  is  declared  void." 

The  Court  further  ruled  that  : 

.  '  "The  respondent  No.  1,  accordingly,  stands  dis- 
qualified for  a  period  of  six  years  from  the 
date  Of  this  order,  as  provided  in  section  SA 
of  the  Representation  of  the  People  Act," 

The  Court  further"  directed  : 

"The  operation  of  the  said  order  is  accordingly 

stayed  for  a   period   of  twenty  days.     On 

:■•   the:rexpky  of  the  said  period  of  20  days  or 

.;,.  as  soon  as  an  appeal  is  filed  in  the  Supreme 

\  :  Court,  whichever  takes  place  earlier,     this' 

order  shall  cease  to  carry  effect." 

5.2  Following  the  judgment  of  the  Allahabad  High 
Court  setting  aside  the-  election  of  Smt.  Indira  Gandhi 
there  was  a  spurt  of  political  activity  m  Delhi  in  parti- 
cular and  in  the  rest  of  India  in  general. 

5.3  Apparently,  an  effort  was  made  by  the  follow- 
ers of  Smt.  Indira  Gandhi  to  create  an  atmosphere  that 
she  should,  notwithstanding  that  she  was  unseated  and 
disqualified  to  stand  for  election,  continue  to  remain 
and  function,  as  Prime  Minister  of  India  -regardless  of 
the  High1  Court  verdict.  With  that  object  in  view, 
a  number  of  demonstrations,  rallies  and  meetings  were 
arranged  by  her  supporters  in  Delhi  and  elsewhere. 

5.4  The  post-judgment  scene  in  Delhi  and  some  of 
the  adjoining  States  was  spoken  to  by  a  number  of 
witnesses.  Shri  Bhawani  Mai,  the  then  Inspector 
General  of  Police,  Delhi,  stated  that  there  was  no 
denying  the  fact  that  there  had  been  a  spurt  of  activity 
in  the  wake  of  the  announcement  of  Shri  Justice 
Sinha's  verdict.  Several  demonstrations,  rallies  and 
public  meetings  were  organised  between  June  12  and 
25.  Most  of  these  were  in.  favour  of  the  former 
Prime  Minister,  while  a  few  were  directed  against  her, 
and  all  this  generated  tension  but  no  untoward  incident 
occurred  during  that  period. 


5.5  Shri  Kxishan  Chand,  the  then  Lt.  Governor, 
Delhi,  stated  that  soon  after  the  pronouncement  of 
Allahabad  High  Court  judgment,  he  was  called  to  the 
Prime  Minister's  House,  but  lie  sent  Shri  Navin 
Chawla,  his  Secretary,  to  proceed  to  the  Prime 
Minister's  House.  He  stated  that  he  learnt  from  Shri 
Navin  Chawla  that  in  order-  to  cope  up  with  the  law 
and  order  situation  that  might  develop  from  the  threa- 
tened opposition  rallies,  it  was  decided  to  organise 
rallies  in  support  of  the  Prime  Minister;  and  for  this 
purpose  people  had  to  be  collected  from  various  places. 
Shri  Krishan  Chand  also  stated  that  he  was  told  that 
public  utility  services  would  also  be  mobilised  for  the 
purpose.  These  services  included  New  Delhi  Munici- 
pal Committee,  Delhi  Transport  Corporation  and  Delhi 
Electric  Supply  Undertaking.  He  further  stated  that 
rallies  and  Ringing  of  people  to  the  House  of  the 
Prime  Minister  continued  after  the  12th  of  June  in 
order  to  show  support  to  the  Prime  Minister. 

5.6  The  records  of  Delhi  Transport  .Corporation 
show  that  1761  DTC  buses  were  requisitioned  t\iy  the 
All  India  Congress  Committee  or  the  Delhi  Pradesh 
Congress  Committee  for  organising  the  rallies  in 'sup- 
port of  Smt.  Indira  Gandhi  between  June  12,  1975 
and  June  25,  1975.  Shri  J.  R.  Anand,  who  was 
working  as  a  Traffic  Manager  in  Delhi  Transport 
Corporation    (DTC)    stated  that  buses  were  mostly 

■booked  on  his  own  orders  as  the  Traffic  Manager  and 
that  he  did  it  in  pursuance  of  the  decision  taken  by 
the  Chairman  of  the  DTC,  who  was  also  the  Lt. 
Governor.  The  instructions  were  given  in  a  meeting 
held  at  Raj  Nivas  that  full  cooperation  should  be 
given  by  the  DTC  by'arranging  buses  to  carry  people 
who  were  taking  part  in  rallies  to  be  organised  to 
express  solidarity  to  the  then  Prime  Minister.  Shri  J.  R. 
Anand  has  stated  that  according  to  the  DTC  Rules 
for  special  hire  by  a  private  party,  an  application  in 
prescribed  proforma  accompanied  by  advance  payment 
is  required;  but  this  formality  was  not  observed  in  the 
case  of  the  bookings  made  by  the  AICC.  The  buses 
were  booked  on  the  basis  of  telephonic  instructions 
received  from  Shri  Navin  Chawla,  the  then  Secretary 
to  the  Lt.  Governor.  In  the  cases  of  major  bookings, 
the  details  regarding  the  number  of  buses  and  the 
parties  and  places  to  which  they  would  report,  were 
given  by  Shri  Navin  Chawla.  In  small  bookings,  Shri 
J.  ;R.  Anand  stated  that  Shri  Navin  Chawla  told  him 
to  i  get  in  touch  with  certain  Congress  leaders  for  de- 
tails. Shri  Anand  further  stated  that  in  the  case  of 
heavy  number  of  buses  booked  on  June  12  and  20, 
the  buses  had  to  be  withdrawn  from  the  scheduled 
operations,  thus  affecting  the  normal  services;  that 
the  number  of  buses  booked  during  the  period  June 
12  to  25,  1975,  on  special  hire,  was  much  above  the 
normal  booking  allowed  for  private  parties,  which  is 
five  buses  per  depot;  that  the  total  number  of  buses 
which  could  be  booked  was  95  a  day  which  was  far 


I? 


18 


exceeded  in  the  cases  of  the  buses  booked  by  the  AICC 
and  the  individual  Congress  leaders.  This  adversely 
affected  the  normal  operations  of  the  DTC  and  caused 
much  inconvenience  to  the  public.  Shri  J.  R.  Anand 
has  also  stated  that  an  amount  of  Rs.  4  lakhs  on 
account  of  special  hire  charges  ox  the  buses  is  -still 
outstanding  against  the  AICC  and  DPCC  for  over 
two  years. 

5.7  On  June  13,  1975  the  entire  fleet  of  983  buses 
plying  on  the  Delhi  routes  was  taken  off  the  rriad  and 
the  buses -were  diverted  to  converge  on  the  Prime 
Minister's  House,  No.  1,  Safdarjung  Road  to  register 
their  support  in  favour  of  Smt,  Indira  Gandhi.  Resi- 
dents of  Haryana,  Punjab,  Rajasthan  and  Uttar  Prar 
desh,  which  are  the  States  adjacent  to  Delhi,  were 
sent  in  vehicles  commandeered  by  the  State  authorities 
for  the  purpose,  A  large  majority  of  those  vehicles 
did  not  observe  the  Route  Permits  Rules  required 
under  the  Motor  Vehicles  Act;  and  in  many  cases 
Government  vehicles  were  used  for  which  no  payment 
was  made. 

5.8  The  records  of  the  DTC  clearly  support  the 
evidence  of  the  witnesses  that  Government  employees 
were  pressed  into  service  for  organising  these  rallies. 
A  number  of  buses  deputed  in  connection  with  these 
rallies  were-  required  to  report  to  the  Government 
servants  including  some  senior  officers.  The  state- 
ment of  Shri  Jaswant  Singh,  Depot  Manager,  DTC, 
gave  the  names/designations  of  such  officials,  numbers 
of  buses  which  were  deputed  to  report  to  them  and 
the  relevant  dates,  which  are  given  below  : — 


Name  of  the  Officer  and  designation 


S.H.O.  Police  Station,  Faridabad    . 

Smt.  Meenaxi  Dutfa,  SDM 

S.P.  New  Delhi,  Parliament  Street  Police 
Station,  Shri  K.D.  Nayar. 

S.H.O.  Police  Station,  Gurgaon      , 

S.H.O.  Police  Station,  Rai      . 

Shri  Bakshish  Singh  Gill,  Dy.  S.P.,    En- 
forcement       .        .        ."      , 

Director  of  Transport    .... 

Shri  B.L.  Anand,  S.D.M.      . 

Shri  Sareen,  Sadar  Bazar  Police   Station 

ShriSareen,  Dy.  Director,  Delhi  Admn., 
Delhi       .        . 

Shri  Hayalan,  PA  to  Chief  Secretary,  TIP. 

PA  to  Chief  Minister,  Bihar 


Date  of 
report 

No.  of 
buses 

reported 

12-6-75 

26 

12-6-75 

2 

12-6-75 

2 

16-6-75 

2 

26-6-75  ■ 

4 

12-6-75 

99 

12-6-75 

95 

12-6-75 

16 

12-6-75 

34" 

12-6-75 

J 

12-6-75 

1 

17-6-75 

2 

19-6-75 

60 

20-6-75 

40 

5.9  Rallies  were  held  at  New  Delhi  to  register 
support  for  Smt.  Indira  Gandhi'  to  continue  in  office 
as  Prime  Minister  notwithstanding  the  order  of  the 
Allahabad  High  Court.  Government  organisations 
like  Delhi  Transport  Corporation,  New  Delhi  Munici- 
pal Committee  and  Delhi  Electric  Supply  Undertaking 


participated  in  these  rallies.  Shri  K.  D.  Nayar,  the 
then  Superintendent  of  Police,  New  Delhi,  has  stated 
that  he  used  to  visit  and  supervise  law  and  order 
arrangements  in  the  vicinity  of  the  Prime  Minister's 
House.  According  to  him  the  participants  in  these 
rallies  carried  the  banners  indicating  their  organisations 
and  the  Unions  to  which  they  belonged  ;  and  that  the 
participants  of  those  rallies  used  transport  belonging 
to  their  organisations  for  the  purpose  of  participating 
in  these  rallies. 

5.10  The  statements  of  Shri  B.  K.  Mital,  Assistant 
Secretary  (Education)  NDMC ;  Shri  S;  P.  Goel,  Assis- 
tant Engineer  I,  NDMC  ;  Shri  Devi  Singh,  Painter, 
NDMC  ;  Shri  Krishan  Lai  Chaudhary.  of  the  Horticul- 
ture Department ;  -Shri  V,  K.  Kaushik,  A.E.III(E) ; 
Shri  Chandan  Bedhab,  President,  Workers  Union ; 
Shri  Mohan  Singh,  Junior  Engineer  and  Shri  J.  C. 
Wadhwa,  Senior  Clerk,  all  NDMC  employees  and 
S/Shri  Dhan  Ram,  President  of  the  Employees  Union  ; 
Madan  Lai,  Senior  Vice  President,  Employees  Union 
and  Dalip  Singh,  Party  Leader,  all  of  Delhi  Milk 
Scheme  have  also  supported  the  participation  of  these 
organisations'  employees  and  resources  in  the  pro-Prime 
Minister  rallies. 

5.11  The  participation  in  the  rallies  was  not 
confined  to  Delhi  alone.  Shri  Krishan  Chand, 
Lt.  Governor  deposed  that 

" ....some     neighbouring     States.    like 

Haryana,  Rajasthan,  Western  U.P.  also  sent 
contingents  for  the  purpose.  All  these 
arrangements  were  made  under  instructions 
from  the  P.M.'s  House  conveyed  through 
Mr.  Dhawan  and  the  P.M.  was  kept  informed 
about  the  developments  from  time  to  time." 

5.12  The  records  of  DTC  also  clearly  show  that  a 
number  of  buses  were  deputed  to  make  trips  outside 
the  Union  Territory  of  Delhi.  Under  the  Motor 
Vehicles  Rules,  the  buses  going  outside  the  Union 
Territory  of  Delhi  are  required  to  be  issued  special 
permits  from  the  State  Transport  Authority  for  this 
purpose.  (See  Rule  9).  The  Secretary,  State  Trans- 
port Authority,  has,  however,  informed  the  Coinmis-. 
sion  by  his  letter  dated  November  28,  1977,  that 

" as   per  records  maintained  in  this 

office  no  contract  carriage  permits  .were 
issued  to  the  DTC  for  carrying  contract 
parties  outside  the  Union  Territory  of  Delhi 

■  or  to  any  private  parties  for  use  of  the  DTC 
vehicles  outside  the  Union  Territory  of  Delhi 
during  the  period  from  12th  June,  1975  to 
25th  June,  1975." 

According  to  Shri  J.  R.  Anand,  the  then  Traffic 
Manager,  a  number  of  buses  booked  by  AICC  through 
the  Secretary  to  L.  G.  during  this  period  were  also  sent 
outside  the  territory  of  Delhi,  and  that  under  the  Motor 
Vehicles  Act  route  permits  had  to  be  obtained  for 
sending  vehicles  outside  the  Union  Territory  of  Delhi, 
which  was  not  done  in  this  case ;  and  that  at  a  high 
level  meeting  at  Raj  Niwas,  it  was  decided  that  the. 
buses  should  be  sent  to  the  neighbouring  districts  of 
Haryana  and  U.P.  and  the  instructions  to  allow  the 
buses  to  pass  the  barriers  had  been  given ;  that  to 
ensure  that  the  buses  reached  their  destinations  in  the 


—f.t.-:::-w         ~     .  _  "         _  1-  . ,  ,_  _ 


.19 


neighbouring  States,  the  officers  of  the  DTC  were  also 
deployed  ■  to  accompany  the  buses  ;  and  that  he  had 
also  been  assured'by  Shri  Navin  Chawla  that  the  police 
authorities  and  the  State  Transport,  authorities  had 
been  properly  briefed  and  instructed  to  ensure  that 
the  buses  crossed  the  borders  without  any  route 
permits. 

5.13  Shri  Raj  Roop  Singh,  Inspector,  SHO  New 
Industrial  Township,  Faridabad,  has  stated  that  after 
the  announcement  of  the  Allahabad  High  Court  judg- 
ment, he  received  a  telephonic  message  from  the  police 
Headquarters,  Gurgaon^  that  as  'informed  by  the 
Deputy  Commissioner,  Gurgaon,  about  100  DTC 
buses  would  be  arriving  from  Delhi  for  the  purpose  of 
rallies  in  favour  of  Smt,  Indira  Gandhi  ;  that  he  was 
told,  that  the  buses  would  report  to  the  police  station 
and  that  on  demand  from  the  Labour  Inspectors, 
Officers  of  Industries  Department  and  other  Govern- 
ment Agencies,  Shri  Raj  Roop  Singh  should  permit 
them  to  take  the  buses  with  them  ;  that  the  police 
station  started  receiving  telephonic  messages  from 
various  places  and  the  buses  were  directed  to  report  to 
the  officers  concerned  ;  that  the  majority  of  the  buses  . 
were  taken  by  the  officers  of  the  Labour  Department 
and  Industries  Department  and  people  from  the 
factories  located  in  Faridabad  were  carried  to  Delhi 
on  those  buses ;  that  no  records  were  maintained  with 
regard  to  the  number  of  buses  received  or  despatched  ; 
that  the  police  was  asked  to  arrange  supply  of  trucks 
or  other  conveyance,  e.g.  four  wheelers,  for  carrying 
the  people  to  Delhi ;  that  the  police  used  to  ask  the 
Truck  Unions  and  Transport  companies  to  supply  the 
required  number  of  vehicles ;  that  this  was  done  under 
the  direction  ,of  the  District  Magistrate  and  the  trucks 
wet'e  collected  in  SDM's  court  at  Ballabgarh,  where 
the  Block  Development  .Officers  (BDOs)  or  Tehsildars 
used  to  take  charge  of  the  vehicles;  and  that  the 
Patwaris  and  Gramsewaks  were  detailed  to  take  trucks 
to  the  villages  and  to  collect  the  people  from  there  to 
carry  them  to  Delhi. 

5.14  Sub-Inspector  Khan  Chand,  SHO  Sadar 
Police  Station,  Gurgaon,  stated  that  the  SSP  Gurgaon 
and  the  senior  Civil  Officers  had  also  arrived  on  the 
scene  and  under  the  directions  of  senior  officers  some 
buses  were  sent  to  the  city  while  others  were  sent,  to 
various  factories  for  carrying  people  to  Delhi.  Sub- 
Inspector  Jagdish  Lai,  SHO  Police "  Station  City, 
Gurgaon,  has.  stated  that  : — ■ 


".  , The  empty  trucks  passing  the     road 

were  also  sometime  detained  and  asked  to 
report  at  the  Tehsil  Headquarters  for  the 
purpose BDOs  and  Tehsii- 
dars used  to  take  charge  of  these  vehicles 
and  detailed  the  Patwaris,  Gramsewaks  etc. 
for  taking  these  vehicles  to  villages  and 
bringing  people  from  there  for  taking  them 
to  Delhi." 

5.15  Shri  N.  K.  Garg,  District  Magistrate,  Rohtak 
has  stated  that  on  June  12,  1975,  Shri  Bansi  Lai, 
Chief  Minister,  Haryana,  rang  him  from  Haryana 
Bhawan,  New  Delhi,  round  about  10.30  a.m.  and 
informed  him  that  the  Prime  Minister  had  been  un- 
seated in  the  Allahabad  High  Court,    judgment,     and 


desired  that  truck  loads  of  people,  as  many  as  possible 
be  sent  from  2.30  p.m.  onwards  to  the  P.M.'s  House ; 
and  that  in  that  connection  Shri  Garg  should  contact 
the  local  MLA,  Lala  Shri  Kishan  Das  who  would 
muster. the  Congress  workers  and  that  Bansi  Lai  had 
also  directed  that  the  persons  should  raise  slogans  ; 
that  pursuant  thereto  he  immediately  got  in  touch 
with  Shri  Krishan  Das  and  conveyed  the  whole  message 
to  him  and  called  Shri  S.  H,  Mohan,  SSP  and  asked 
him  that  he  should  make  an  effort  to  get  as  many 
trucks  as  possible  for  taking  these  people  to  Delhi. 
He  also  stated  that  he  had  received  a  similar  message 
from  Ch.  Dalbir  Singh,  the  then  Deputy  Minister  for  ' 
Shipping  in  the  Central  Cabinet. 

5.16  The  statement  of  Shri  Garg  is  supported  by  the 
statement  of  Shri  S,  H.  Mohan.  Shri  M.  K.  Miglani, 
who  was  then  holding  the  office  of  the  District  Magis- 
trate, has  also,  confirmed  in  his  statement  the  instruc- 
tions given  by  Shri  Bansi  Lai,  the  then  Chief  Minister, 
Haryana.  According  to  Shri  Miglani,  he  learnt  from 
the  local  leaders  that  out  of  100  DTC  buses  that  had 
come  to  Faridabad  factory  area  omy  about  40  buses 
load  could  be  sent,  whereas  the  remaining  buses  had 
to  return  empty  because  they  were  unable  to  muster 
enough  factory  workers  for  this  purpose. 

5.17  On  June  13,  1975  ;md  again  on  June  18,  1975, 
about  800  to  900  employees  of^DESU  participated  in 
pio-P.M.  rallies  outside  the  residence  of  Smt.  Indira 
Gandhi  at  the  call  of  the  Delhi  State  Electricity 
Workers  Union.  This  is  supported  by  Shri  S.  N. 
Srivastava,  Chief. Labour  Welfare  Officer,  DESU  and 
Shri  K.  P.  Saxena,  Controller  Rajghat  Power  House. 

5.18  Another  major  rally  took  place  on  June  20, 
1975,  where  as  many  as  497  DTC  buses  had  been 
requisitioned  by  the  organisers  of  the  rally  as  against 
the  permissible  number  of  95  buses,  which  could  have 
been  booked  on  special  hire  by  private  parties  on  one 
single  day.  Efforts  were  also  made  in  the  State  of 
Haryana  to  contribute  to  the  rally  and  this  is  seen 
from  the  statements  of  S/Shri  N.  K.  Garg,  District 
Magistrate,  Rohtak  ;  S.  H.  Mohan.  SSP  Rohtak  and 
M.  K.  Miglani,  District  Magistrate  Gurgaon.  Accord- 
ing to  Shri  N.  K.  Garg,  District  Magistrate,  Shri  Bansi 
Lai  had  told  him  that  this  was  a  prestigious  rally  and 
a  personal  and  crucial  affair.  So,  the  District 
Administration  should  not  lag  behind  in  this  task. 

5.19  The  state  of  affairs  in  this  regard     was     not 

different  in  the  State  of  Punjab.     The  Chief  Secretary, 
Shri  R.  S.  Talwar,  has  stated  that  : 

"When  it  came  to  my  knowledge     that    official 
machinery  was  befog  utilised  for  organising 
transport  and  mustering  men  and  money  for 
the  purpose,     I  advised     the     theft     Chief, 
Minister  not  to  let  Government  and  semi-y. 
Government  agencies    and.  their  personnel 
being  used  in  support  of  a  political  struggle 
with  which  they  as  such  were  not  concerned. 
This  advice  was  not  liked,  nor  did  it  have 
much  effect  and  official  machinery  continued 
to  be  utilised  for  mobilising  men,  money  and 
transport  to  be  sent  to  Delhi," 


■in.— m m 


20 


5.20  According  to  the  records  of  the  Northern 
Railway,  three  special  trains  were  arranged — one  each 

'  .from  Varanasi,  Lucknow  and  Kanpur  on  June  19, 
1975,  which  arrived  in  New  Delhi/Delhi  on  June  20, 
1975.  Two  of  these  special  trains  had  been  booked 
by  known  Congressmen.  The  identity  of  the  party 
requisitioning  the  special  ex- Varanasi  special  train 
was  not  available  on  the  file  but  the  special  train  was 
arranged  for  the  Congress  delegates.  For  return 
journey  two  special  trains  were  sent  on  June  21,  J  975. 

5.21  From  the  State  of  Rajasthan  also,  according 
to  the  Rajasthan  State  Electricity  Board  records,  58 
trucks  belonging  to  the  State  Electricity  Board  were 
ordered  by  the  Chief  Minister  to  be  placed  at  the 
disposal  of  the  Workers'  Union.  Even  though  the 
Chairman  of  the  Electricity  Board,  Shri  Mangal  Behari, 
had  directed  that  appropriate  charges  should  be  made, 
but  no  payment  of  .hire  charges  was  made  either  by 
the  Government  or  by  the  Workers'  Union. 

5.22  On  June  22,  1975,  the  Opposition  parties 
had  organised  a  rally  which  was  to  be  addressed  by 
Shri  Jaya  Prakash  Narayan.  This  caused  considerable 
concern  in  the  official  circles.  This  is  seen  from  the 
statement  of  Shri  Krishan  Chand,  Lt,  Governor,  who 
stated  that 

"Several  meetings  were  also  held  in  the  Home 
Ministry  to  consider  as  to  how  best  the 
situation  developing  from  the  speeches  of 
Shri  Jaya  Prakash  Narayan  could  be  dealt 
with.  At  the  official  level,  the  view  was  that 
whatever  might  fee  done  in  respect  of  other 
leaders,  Shri  Jaya  Prakash  Narayan's  arrest 
would  make  it  more  difficult  to  preserve 
public  peace   than  if  he  was  not  arrested 

.This  view  eventually     did  not 

prevail.  However,  Shri  Jaya  Prakash 
Narayan  could  not  come  to  Delhi  to  address 
the  meeting  at  Rarnltla  Grounds  on  June  22, 
1975." 

5.23  While  Government  bodies  were  vying  with 
each  other  to  show  their  support  to  or  sympathy  for 
the  Prims  Minister  by  misusing  Government  resources, 
there  were  Government  employees,  both  highly  and 
lowly  placed,  who  were  not  willing  to  be  a  party  to, 
what  they  thought  was  wrong  and  improper  in  terms 
of  employment  of  Government  resources  for  a  political 
party  for  partisan  purposes.  Shri  R.  N.  Bhatnagar  of 
the  NDMC  opposed  the  diversion  of  the  NDMC  trucks 
from  the  normal  duties  to  proceed  to  the  P.M.'s  House, 
and  lay  in  front  of  a  truck  of  the  NDMC.  which  was 
sought  to  be  diverted  to  proceed  to  the  P.M's  House ; 
He  pleaded  that  if  the  employees  and  the  authorities 
wanted  to  signify  their  support  to  Smt.  Indira  Gandhi, 
they  were  welcome  to  do  so  but  not  at  the  cost  of  the 
civic  resources. 

5.24  Certain  employees  of  the  DESU,  who  refused 
to  participate  in  these  rallies,  were  allegedly  beaten  up 
by  the  more  enthusiastic  amongst  the  supporters  of 
the  Prime  Minister. 

5.25  Shri  Mangal  Behari,  IAS,  the  Chairman  of  the 
Rajasthan  Electricity  Board  became  the  victim  of  the 


wrath  of  the  State  Government  of  Rajasthan  as  he 
had  refused  to  fall  in  line  with  the  demand  for  sending 
the  Electricity  Board  workers  in  the  Electricity-  Board 
trucks,  free  of  cost  to  attend  the  rally  in  Delhi  arranged 
on  June  20,  1975  to  show  support  to  and  solidarity 
with  Smt.  Indira  Gandhi.  The  details  of  the  incident 
will  be  set  out  hereafter  when  the  Commission  deals 
with  the  case  of  Shri  Mangal  Behari. 

5.26  While  the  Government  resources  in  Delhi  and 
elsewhere  were  being  utilised  to  demonstrate  support 
in  favour  of  the  Prime  Minister,  the  law  was  also 
discriminately  applied  to  the  Congress  party  as  against 
the  other  parties.  Enforcement  of  prohibition  of 
meetings  under  section  144  of  the  Criminal  Procedure 
Code,  which  had  become  a '  normal  feature  in  the 
vicinity  of  the  Prime  Minister's  House,  was  relaxed 
when  it  came  to  demonstrations  and  rallies  arranged 
by  the  Congress  party  in  support  of  the  Prime  Minister. 
This  matter  was  reported  to  the  President,  who  sent 
for  the  Lt.  Governor  of  Delhi  and  enquired  of  him  as 
to  why  the  other  parties  were  not  being  given  the  same 
facilities  as  were  being  given  to  the  Congress  party. 
The  Lt.  Governor  stated  before  the  Commission  that 
he  had  told  the  President  that  if  the  opposition  parties 
were  also  directed  to  have  the  same  facilities,  that 
would  have  led  to  clashes  creating  a  law  and  order 
situation.  The  Lt.  Governor  further  stated  that  this 
relaxation  was  made  in  favour  of  the  Congress  party 
in  the  order  under  section  144  of  the  Code  of  Criminal 
Procedure  at  the  instance  of  the  then  Prime  Minister. 

5.27  While  these  demonstrations  of  sympathy  and 
support  to  the  Prime  Minister  were  going  on  apace, 
the  Intelligence  Bureau  of  the  Government  of  India 
was  being  used  to  maintain  surveillance  on  the  activities 
of  some  of  the  important  Congress  leaders  and 
Ministers.  The  Commission  came  across  a  Top  Secret 
note  dated  June  18,  1975,  sent  by  the  then  Director, 
Intelligence  Bureau,  to  the  Prime  Minister's  Secretariat. 
It  contains  matters  which  among  other  things  could 
have  been  compiled  only  on  the  basis  of  a  physical 
watch  and  telephone  tappings  of  the  persons  concerned. 
This  raises  a  very  important  issue  which  has  relevance 
to  the  assault  on  the  privacy  of  the  individuals  and 
even  of  Ministers  of  Government  for  purposes  which 
are  other  than  those  strictly  necessary  for  ensuring  the 
security  of  the  State. 

5.28  Shri  Jagjiwan  Ram,  then  Minister  in  Smt. 
Indira  Gandhi's  Cabinet  stated  before  the  Commission 
that  even  before  the  imposition  of  the  Emergency,  his 
movements  were  watched  and  that  his  telephone  was 
tapped.  This  he  was  able  to  assert  on  the  basis  of 
the  information,  which  was  furnished  to  him  by  the 
concerned  officials,  who  owed  loyalty  to  him.  He 
was  very  critical  of  the  Intelligence  Bureau,  who  he 
said,  was  feeding  the  Prime  Minister  with  information- 
some  correct,  some  incorrect  ■  and  some  fabricated. 
After  the  imposition  of  the  Emergency,  the  watch  on 
him  was  intensified.  Shri  Jagjiwan  Ram  felt  very 
strongly  about  the  physical  watch  on  the  Ministers 
and  citizens  as  it  was  a  gross  interference  with  the 
riehts  of  citizens  and  their  individual  freedom  which 
should  not  be  permitted  in  a  democracv.  He  felt  that 
this  was  happening  even  before  the  Emergency  and 
was  intensified  during  the  Emergency  and  according 


21 


-^.s ^-•.■■yr^-^---'..-^- 


:lV.>rtt:;Ei;:S»jafeyii!iU-,"iJi:Umi-isiiMi_ 


to  him  it  had  not  ceased  even  after  the  Emergency. 
He  was  also  critical  of  the  employment  of  the  Intelli- 
gence Bureau  for  assessing  the  election  prospects  of 
the  Congress,  and  ascertaining  through  the  Intelligence 
Bureau  the-  suitability  of  candidates  for  contesting  'the 
election  on  behalf  of  the  Congress  Party.  Intelligence 
Bureau  officer's  conducting  such  inquiries  were  feci 
with  misleading  information  by  interested  candidates 
and  in  consequence  the  feed  back  to  the  Prime  Minister 
by  the  Intelligence  Bureau  proved  equally  misleading. 

5.29  The  decision  to  take  certain  drastic  steps 
including  even  the  declaration  of  Emergency  was, 
apparently,  in  contemplation  even  as  early  as  June  22, 
1975.  On  June  22,  1975,  Shri  R.  K.  Dhawan  rang 
up'Andhra  Pradesh  Chief  Minister  Shri  J.  Vcngala 
Rao,  and  told  him  to  be  available  at  Delhi  on  June  24, 
1975,  when  the  judgment  Of  the  Supreme  Court  relating 
i  to  the  stay  order  applied  for  by  Smt.  Gandhi  pending 
decision  of  the  appeal  filed  by  her  was  expected  to  be 
announced.  Presumably,  the  order  which  the  Supreme 
Court  would  make  was  to  be  the  deciding  factor  on 
whether  the  drastic  action  contemplated  to  be  taken, 
should  in  effect  be  instituted.  If  the  judgment  had 
i  been  in  the  nature  of  a  categorical  and  an  uncondi-  ■ 
I  tional  stay,  probably  no  action  of  the  nature,  which 
was  Ultimately  taken,  would  have  followed.  But  the 
Supreme  Court  gave  only  a  conditional  order.  On 
June  24,  1975,  Shri  Justice  Krishna  Iyer  delivered  his 
judgment  on  the  appeal  of  Smt.  Indira  Gandhi.  The 
operative  portions  of  the  judgment  are  as  follows  : 

"(i)  Subject  to  paragraph  (iii)  below  there  will 
be  a  stay  of  the  operation  of  the  judgment 
and  order  of  the  High  Court  under  appeal. 

(ii)  Consequently,  the  disqualification  imposed 
upon  the  appellant  as  a  statutory  sequal  under 
section  8A  of  the  Act  and  as  forming  part 
of  the  judgment  "and.  order  impugned  will 
also  stand  suspended.  That  is  to  say,  the 
petitioner  will  remain  a  Member  of  the  Lok 
Sabha  for  nil  purposes  except  to  the  extent 
restricted  by  para  (iii)  so'  long  as  the  stay 
;      ■      ■  lasts. 

(iii)  The  appellant  petitioner,  a  Lok  Sabha 
Member,  will  be  entitled  to  sign  the  register 
■  •  kept  in  the  House  for  the  purpose  and  attend 
the  Session  of  the  Lok  Sabha.  But  she  will 
neither  take  part  in  the  pivmeediflga  in  tins 
Lok  Sabha  nor  vote,  nor  draw  a  remunera- 
tion in  her  capacity '  as  a  Member  of  the 
Lok  Sabha. 

(iv)  Independently  of  the  restrictions  under  para 
(iii)  on  her  Membership  of  the  Lok  Sabha, 
her  right  as  Prime  Minister  or  Minister  so 
long  as  she  fills  that  office,,  to  speak  in  and 
otherwise  to  take  part  in  the  proceedings  of 
either  House  of  Parliament  or  attend  sitting 
of  the  Houses  (without  the  right  to  vote) 
and  to  discharge  other  functions  such  as  are 

.      .  laid  down  in. the  Article  74.  75,  78,  88  etc. 

or  under  anv  other  law-  and  to  draw  salary 

as  Prime  Minister,  shall  not  be  affected  or 

.  detracted  from  on  account  of  the  conditions 

.  .    contained  in  the  stay  order," 
S/39  HA/77— 4 


5.30  Since  the  judgement  was  conditional,  it  appears 
to  have  been  decided  that  the  plan  of  taking  drastic 
action  was  to  be  gone  through  with  expedition  and 

despatch. 

5.31  According  to  Shri  Krishan  Chand,  the  Lt. 
Governor,  Delhi,  even  as  early  as  the  evening  of  23rd, 
a  decision  had  been  taken  to  take  the  Opposition 
leaders  into  custody  soon  after  the  Opposition  rally, 
scheduled  for  June  24,  was  held.  Lists  of  the  Opposi- 
tion leaders,  which  were  to  be  arrested  were  also  under 
preparation. 

5.32  It  appears  from  the  report  dated  June  18,  1975,* 
of  the  Director  of  the  Intelligence  Bureau,  Shri  Atma 
Jaya  Ram  that  considerable  political  activity  took  place 
between  June  15  and  18.  The  important  aspects  of 
the  political  activity  were  that  Shri  Krishan  Kant, 
Shri  Chandar  Shekhar  and  Shri  Mohan  Dharia  were 
active  in  putting  forth  the  view  that  Smt.  Indira  Gandhi 
should  step  down  and  that  the  party  should  elect  a 
new  leader.  Smt.  Lakshmi  Kanthamma  was  also  of 
this  view.  Shri  Krishan  Kant  pointedly  expressed  the 
view  that  so  long  as  Smt.  Gandhi  remained  in  office 
the  Opposition  would  get  "a  one-line  programme"  and  . 
it  could  snowball  into  a  revolution.  Shri  Mohan  Dharia 
was  advised  by  Shri  Y.  B.  Chavan  in  the  afternoon  of 
June  17  not  to  raise  any  dissent  in  the  Parliamentary 
Party  meeting  on  June  18.  SAShri  Chandar  Shekhar 
and  Krishan  Kant  met  Shri  Bahuguna  on  June  17, 
1975  at  U.P.  Nivas.  Substantial  portions  of  this  report 
have  not  been  verified  to  be  correct  and  some  of  them 
have  been  denied  by  Shri  Jagjiwan  Ram,  who  made 
his  statement  before  the  Commission. 

Some  of  the  important  events  between  June  23  and 
25,  1975 

5.33  It  was  expected  that  a  rally  would  take  place, 
headed  by  Shri  Jaya  Prakash  Narayan  on  June  24, 
1975.  In  the  evening  of  June  23  an  indication  was, 
given  to  Shri  Krishan  Chand,  Ll,  Governor  by  Shri 
R.  K.  Dhawan  that  the  Opposition  Leaders  may  have 
to  be  taken  into  custody  after  the  rally  on  June  24 
and  lists  of  prominent  political  leaders  to  be  arrested 
were  prepared  by  S.  P.  (CID)  at  P.M's  House.  Shri 
Krishan  Chand  stated  that  he  was  shown  the  lists  and 
that  changes  were  made  in  the  lists  and  continued  to 
be  made  from  time  to  time  as  a  result  of  continued 
discussions  at  P.M's  House,  but  that  he  did  not  see 
the  final  list.  He  also  stated  that  the  Opposition  rally 
did  not  take  place  on  June  24  as  announced  to  take 
place  on  that  day,  and  so  the  action  proposed  to  be 
taken  on  June  24  was  stayed. 

5.34  On  June  24,  Shri  Justice  Krishna  Tver 
announced  the  judgment.  The  Hindi  version  of  the 
judgment  broadcast  over  the  All  India  Radio  gave  the 
complete  storv-  This  gave  rise  to  certain  angry  re- 
actions and  the  Minister  spoke  to  the  Director  of 
News.  Within  a  short  time  a  revised  Hindi  version 
was  broadcast  which  was  intended  to  be  favourable  to 
Smt.  Indira  Gandhi,  as  broadcast  in  the  Enfflish  bulletin 
at  4  p.m.  In  the  meanwhile,  the  authentic  copies'  of 
the  iudgrnent  were  obtained.  According  to  Shri 
Krishan  Chand,  after  the  import  of  the  judement  was 
fully  realised,  it  was' decided  to  take  drastic     action 


22 


against  the  Opposition  leaders  -as  soon  as  there  were 
tangible  signs  of  any;  effort  on  their  part  to  dislodge 
the  Prime  Minister  from  her  office  and  it  was  decided 
by  the  Prime  Minister  that  action  would  be  taken  on 
June  25  after  the  Opposition  rally. 

5.35  On  June  24,  1975,  Shri  J.  Vengala  Rao 
received  a  telephonic  message  from  Shri  R.  K.  Dhawan 
requesting  him  to  meet  the  Prime  Minister  on  June  25. 
Shri  Vengala  Rao  has  stated  that  Smt.  Indira  Gandhi 
informed  him  that  having  regard  to  the  prevailing 
conditions  and  the  contemplated  country-wide  agitation, 
it  had  been  decided  to  take  strong  and  deterrent  action  ; 
and  as  this  was  sure  to  cause  resentment  and  there 
was  a  possibility  of  some  violent  action,  it  would  be 
necessary  to  take  all  preventive  actions  including 
arrests  of  presons  who  were  likely  to  cause  disturbance. 
He  further  stated  that  he  was  requested  to  pass  on 
the  message  to  the  Chief  Minister  of  Karnataka,  who 
could  not  be  present  and  ths?  both  the  Chief  Minister 
of  Karnataka  and  Shri  Vengala  Rao  were  asked  to  be 
available  on  the  telephone  on  June  25  when  the  final 
decision  of  the  Government  of  India  would  be  com- 
municated to  them  by  Shri  Dhawan.  Shri  Vengala 
Rao  left  by  an  IAF  plane,  which  was  specially  arranged 
for  him  for  making  a  trip  to  Bangalore.  He  stated 
that  he  met  the  Chief  Minister  of  Karnataka  at  Banga- 
lore, apprised  him  of  what  the  Prime  Minister  wanted 
him  to  tell  him  and  in  the  evening  he  reached 
Hyderabad-  by  the  same  plane. 

5.36  Shri  P.  C.  Sethi,  Chief  Minister  of  Madhya 
Pradesh,  was  told  at  the  residence  of  the  Prime  Minister 
on  the  morning  of  June  25  by  Shri  Om  Mehta,  Minister 
of  State  for  Home  Affairs,  about  the  guidelines  that 
he  would  have  to  observe  in  taking  into  evistody  certain 
persons,  who  were  capable  of  creating  disturbances. 
According  to  Shri  P.  C.  Sethi,  it  took  place  in  the 
presence  of  the  Prime  Minister. 

5.37  The  Prime  Minister  tried  to  pet  in  touch  with 
Shri  Harideo  Joshi,  Chief  Minister  of  Rajasthan,  but 
she  was  unsuccessful  in  conveying  that  message  to 
Shri  Harideo  Joshi  on  telephone.  Shri  Sethi  was" then 
asked  to  contact  Shri  Harideo  Joshi  at  Banswara  on 
his  way  to  Bhopal  and  convey  the  same  message  to 
him.  Accordingly,  Shri  Sethi  went  to  Bhopal  via 
Banswara  by  an  IAF  aircraft.  At  Bhopal  Shri  Sethi 
took  steps  in  pursuance  of  the  instructions  that  had 
been  given  to  him  by  the  Prime  Minister.  Shri  Harideo 
Joshi  returned  to  Jaipur  by  the  same  aircraft,  which 
after  leaving  Shri  Sethi  at  Bhopal,  had  come  to  Bans- 
wara for  this  purpose. 

5.38  The  records  maintained  at  the  Air  Headquar- 
ters of  the  IAF  confirm  the  flights  of  Shri  Vengala 
Rao,  Shri  P.  C.  Sethi  and  Shri  Harideo  Joshi  by  the 
IAF  aircrafts  on  June  25,  1975.  No  payments  were 
apparently  made  by  anyone  for  the  use  of  the  IAF 
aircrafts. 

5.39  Shri  S.  K.  Misra,  who"  was  the  Principal 
Secretary  to  the  Chief  Minister,  Haryana,  has  in  his 
statement  before  the  Commission,  stated  that  between 
12  noon  and  2  p.m.  on, June  25,  1975,  he  received 
from  Delhi  a  telephonic,  information  from  Shri  Bansi 
Lai,  the  then  Chief  Minister  of  Haryana,  asking  him 


to  alert  the  Deputy  Commissioners  to  remain  at  their 
Headquarters  and  be  available  on  telephones  and  also 
to  reserve  huts  at  Sohna  Tourist  Complex  for  two 
VIPs,  who  were  to  reach  there  on  the  night  of  June 
25/26,  1975.  Lists  of  persons  to  be  taken  into  cus- 
tody were  to  be  prepared  by  A.D.I.G.,  C.I.D.  Shri 
Misra  met  Shri  Bansi  Lai  at  about  10  p.m.  on  his 
return  from  Delhi,  At  that  time  the  latter  told  him 
that  Emergency  was  expected  to  be  declared  that  night. 
This  statement  of  Shri  S.  K.  Misra  is  corroborated 
by  the  statement  of  Shri  N.  K,  Garg,  the  then  Deputy 
Commissioner,  Rohtak,  who  had  also  met  Shri  Bansi 
Lai  at  Rohtak  at  about  4,30  p.m. 

5.40  Shri  M.  K.  Miglani,  who  was  the  Deputy 
Commissioner  at  Gurgabn,  had  taken  steps  to  reserve 
two  huts  in  Sohna  Tourist  Complex  on  June  25  in 
pursuant  to  the  message  received  from  Shri  S.  K. 
Misra.  He  also  contacted  the  Lt.  Governor  of  Delhi 
and  in  response  to  his  directions  detailed  one  of  his 
officers  to  reach  Haryana  Bhawan,  New  Delhi,  at 
about  10  p.m.  on  the  night  of  June  25,  1975,  where 
the  Delhi  Administration,  authorities  were  to  contact 
him.- 

5.41  The  District  Magistrate,  Darbhanga  (Bihar) 
had  conveyed  to  the  then  Chief  Minister  of  Bihar  a 
message,  which  he  had  received  from  Patna,  to  the 
effect  that  the  Chief  Minister  of  Bihar  was  to  contact 
the  Prime  Minister's  House  at  about  9  p.m.  on  the 
night  of  June  25.  Accordingly,  the  Chief  Minister 
contacted  the  Prime  Minister's  House  and  after  the 
telephonic  talk  that  the  Chief  Minister  had  with  the 
Prime  Minister,  the  Chief  Minister  is  reported  to  have 
told  the  District  Magistrate  that  he  wanted  to  get  back 
to  Patna  the  same  night  by  road  and  he  wanted  to 
know  the  provisions  under  the  Defence  of  India  Rules 
with  regard  to  the  Press.  The  Chief  Minister*  told 
the  District  Magistrate  to  convey  to  the  Home  Secre- 
tary and  TGP  the  desire  of  the  Chief  Minister  that 
they  should  meet  him  at  his  residence  at  about  2.30 
a.m.  on  the  night  between  June  25/26,  1975. 

5.42  According  to  the  statement  of  Shri  Krishan 
Chand,  all  arrangements  in  connection  with  the, im- 
pending arrests  were  discussed  at  a  meeting  in  the 
afternoon  of  June  25  in  the  room  of  Shri  R.  K. 
Dhawan  in  the  presence  of  Shri  Om  Mehta,  the  then 
Minister  of  State  for  Home  Affairs,  Shri  Bansi  Lai 
and  Shri  Bajwa,  S.P.  (CID),  Delhi  Administration. 
Shri  Krishan  Chand  then  called  a  meeting  at  about 
7.30  p.m.  at  Raj  Niwas  at  which  the  Chief  Secretary, 
I.G.  Police,  Deputy  Commissioner,  DIG  (Range)  and 
others  were  present.  The  Chief  Secretary  of  Delhi 
Administration.  Shri  J.  K.  Kohli  had  been  instructed 
to  visit  the  Tihar  Jail  to  arrange  necessary  accommo- 
dation in  the  jail  for  those  who  would  be  rounded. up 
in  the  course  of  the  night  between  June  25/26,  1975 
and  taken  to  Tihar  Jail.  Accordingly,  Shri  Kohli  had 
visited  the  Tihar  Jail  at  about  8.15  p.m.  in  the  night, 
checked  up  the  availability  of  accommodation  there 
and  had  tipped  off  the  Superintendent  of  Jail  that  he 
should  be  prepared  to  receive  about  200  "Naga 
Political  Prisoners",  by  the  next. morning. 

5.43  Efforts  were  also  made  to  ensure  that  some 
important  newspapers  were  prevented  from  bringing 


».     ".._,     '..^kL 


23 


out  the  morning  editions  on  June  26,  1975.  Shri  B,  N. 
Mehrdtra,  Ex-General  Manager,  Delhi  Electric  Supply 
Undertaking  has  stated  that  he  was  called  to  Raj 
Niwas  by  the  Lt.  Governor  at  about  10  p,m.  and  told 
that  the  electricity  connections  to  the  Press  were  -to 
be  disconnected  from  2  a.m.  that  night  and  Shri 
Krishan  Chand  said  that  these  were  the  orders  from 
the  Prime  Minister's  House  and  had  got  to  be  carried 
out.  Shri  Mehrotra  carried  out  the  orders  and  report- 
ed compliance  thereof  at  about  2  a.m.  to  Shri  Navin 
Chawla,  Secretary  to  the  Lt.  Governor. 

5.44  Efforts  were  also  made  to  prevent  publication 
of  newspapers  in  Chandigarh  and  Bhopal.  Shri  N.  P. 
Mathur,  who  was  the  Chief  Commissioner  at  Chandi- 
garh, had  not  received  any  direct  instructions  either 

..  from  the  Home  Secretary  or  from  any  other  respon- 
sible quarters  in  Delhi.  Shri  N.  P.  Mathur  had  con- 
tacted over  the  phone  on  June  25,  1975  the  Home 
Secretary,  Shri  S.  L.  Khurana  to  obtain  confirmation 

.  of  .the  instructions  of  the  Chief  Minister  of  Punjab. 
Shri  Khurana  disclaimed  any  knowledge  on  the  subject, 
He,  therefore,  did  not  act  on  the  verbal  instructions 

■  received  by  him  from  Shri  Zail  Singh,  Chief  Minister 
Of  Punjab,  to  lock  up  "The  Tribune"  and  its  Editor, 
Shri  Madhavan  Nair  at  Chandigarh. 

5.45  Initially  instructions  were  issued  by  the  Chief 
Minister  of  Madhya  Pradesh  at  about  9  or  10  p.m. 
on  June  25,  1975  to  the  effect  that  news  about  the 
arrests  should  not  appear  in  the  newspapers  of  Bhopal 
and  Other  important  places.'  The  same  instructions 
were  subsequently  countermanded  as  testified  by  Shri 
Narendra  Prasad,  the  then  S.P.,  Bhopal. 

5.46  It  would,  therefore,  appear  clear  that  in  vary- 
ing degrees  the  Chief  Ministers  of  several  States  were 
taken  into  confidence  as  early  as  the  morning  of 
June  25,  and  they  had  been  instructed  to  take  steps 
to  take  action  on  receipt  of  the  advice  from  the  Prime 
Minister's  House  that  night.  Those  who  had  infor- 
mation to  this  effect  were  the  Chief  Ministers  of 
Andhra  Pradesh,  Karnataka,  Madhya  Pradesh, 
Rajasthan,  Haryana,  Punjab,  Bihar  and  West  Bengal. 
The  Lt.  Governor  of  Delhi  was  fully  in.  the  picture 
even  before  June  25,  1975. 

5.47  Shri  Sidharth  Shankar  Ray,  Chief  Minister  of 
West  Bengal,  has  stated  that  he  received  'a  message 
from  the  Prime  Minister's  Secretariat  on  the  morning 
of  June  25,  and,  accordingly,  he  went  to  her  house. 
When  she  came  into  the  rooni  where  fte  was  waiting, 
she  had  some  reports  in  her  hand  and  she  stated  that 
the  country  was  in  great  difficulty;  and  that  in  view 
of  the  all-round  indiscipline  and  lawlessness,  she  want- 

,  ed  that  something  should  be  done.  According  to 
Shri  Ray,  she  had  told  him  on  two  cr  three  occasions 
prior  to  this  that  India  required  a-  shock  treatment 
and  something  had  to  be  done  and  some  sort  of 
emergent  power  or  drastic  power  was  necessary.  Shri 
Ray,  remembered  that  one  such  occasion  when  she 
had  mentioned  about  the  shock  treatment  was  some- 
time before  the  announcement  of  Allahabad  judgment 
on  June  12,  1975-  On  this  occasion  he  had  told  her 
that  they  could  manage  with  the  laws,  which  were 
already  on  the  statute  books.  In  this  context  he  had 
also  mentioned  the  success  with  which  they  had  tackled 


the  law  and  order  problems  of  West  Bengal  within 
the  framework  of  the  laws  then  in  force.  According 
to  Mr.  Ray,  the  reports  that  she  read  out  indicated 
that  there  was  lawlessness  or  threats  of  lawlessness  in 
many  parts  of  the  Northern  India;  that  while  they  were 
discussing,  a  bearer  came  in  with  a  piece  of  paper 
from  which  she  read  out  and  said  that  this  was  a 
report  giving  advance  information  about  what  Shri 
Jaya  Prakash  Narayan  was  going  to  say  at  a  public 
meeting  scheduled  for  that  day  in  Delhi;  that  Shri 
Jaya  Prakash  Narayan  would  be  calling  for  a  mass 
movement  within  two  or  three  days  ail  over  India  and 
that  the  usual  things  would  be  said  by  him;  such  as, 
parallel  administration,  parallel  courts,  students  not  to 
join  Universities,.  Schools  and  Colleges;  appeal  to 
policemen  and  to  armed  forces  not  to  obey  what  were 
supposed  to  be  illegal  orders  etc.  Shri  Ray  said  that 
he  did  not  know  from  where  this  report  originated. 
According  to  Shri  Ray,  there  were  certain  things,  which 
when  they  came  from  the  Prime  Minister,  he  could 
not  say  that  they  were  totally  wrong,  particularly  if 
they  were  factual;  but,  according  to  him,  she  was 
firm  on  the  factual  aspect  that  those  reports  indicated 
that  India  was  drifting  towards  chaos  and  anarchy. 
Shri  Ray  then  stated  that  he  told  her  that  he  would 
like  to  consider  the  steps  that  had  to  be  taken,  after 
consulting  the  relevant  literature  on  the  subject ;  that 
she  gave  him  the  impression  that  she  was  seriously 
and  sincerely  disturbed  with  the  conditions  prevailing 
in  the  country;  and  that  he  asked  for  some  time  to 
consult  the  relevant  law  and  left  the  Prime  Minister's 
house;  that  he  came  back  at  about  4.30  or  5  p.m.  and 
told  her  that  she  could  consider  if  she  so  desired, 
Article  352  of  the  Constitution  for  the  purpose  of 
imposing  internal  Emergency;  and  thereupon  she  ask- 
ed Shri  Ray  to  go  along  with  her  to  the  President 
immediately.  The  President  was  then  contacted  and 
an  appointment  was  taken  and  she  went  to  the  Presi- 
dent along  with  Shri  Ray.  She  gave  to  the  President 
a  summary  of  what  she  had  told  Shri  Ray  with  regard 
to  the  facts;  that  the  President  heard  her  for  about 
20  minutes  to  half  an  hour  and  then  asked  Shri  Ray 
as  to  what  were  the  exact  words  in  the  Constitution; 
that  the  President  then  told  the  Prime  Minister  to 
make  her  recommendation;  and  when  she  was  return- 
ing with  him  from  the  President's  house,  he  told  her 
that  she  should  involve  the  other  leaders  also  in  that 
decision;  that  though  he  did  not  name  anyone  in  par- 
ticular, except  the  name  of  Shri  Dev  Kant  Barodah, 
who  was  the  President  of  the  Indian  National  Congress, 
he  wanted  that  she  should  involve  the  other  leaders 
and  talk  to  them  about  this  matter;  that  she  wanted 
to  know  the  answers  to  three  questions,  which  she 
had  raised  : 

"Firstly,  she  wants  to  take  a  decision  without 
going  to  the  Cabinet.     Ts  it  possible  ?  Can 
it  be  done  ? 
Secondly,  what  should  be  the  language  of  the 

letter  to  be  addressed  to  the  President? 
Thirdly,  what  should  be  the  text  of  the  Procla- 
mation ?" 

Shri  Ray  thereafter  consulted  the  Business  Rules  and 
a  notification  pertaining  to  proclamation  of  Emergency 
in  1971.  According  tb  Shri  Ray  the  first  category 
dealt  with  matters,  which  must  go  to  the_  Cabinet;  fhe 
second  category  dealt  with  matters,  which  need  not 


24 


go  at  all  to  the  Cabinet;  and  the  third  category  dealt 
with  matters  which  could  be  dealtrwith  by  the  Prime 
Minister,  but  had  to  be  ratified  by  the  Cabinet.  Smt. 
Gandhi  said  that  she  wanted  to  take  the  decision  her- 
self and  that  she  would  call  a  meeting  of  the  Cabinet 
early  next  morning.  Shri  Ray  then  told  her  that  it 
she  wanted  to  take  the  decision  herself,  she  should 
write  recommending  to  the  President  the  proclamation 
o£  Internal  Emergency  and  avail  herself  of  the  relevant 
Rules,  as  provided  in  the  third  category  of  the  Business 
Rules.  ■  Shri.  Ray  prepared  two  drafts.  According  to 
him,  the  letter,  which  Smt.  Gandhi  had  written  to  the 
President  recommending  the  proclamation  of  the 
Emergency  and  which  was  published  subsequently  in 
the  proceedings  of  the  Commission,  was  not  the  draft 
which  he  had  made  on  the  subject  and  given  to  the 
Prime  Minister.  According  to  Shri  Ray,  Shri  Barooah 
was  also  called  in  later  in  the  evening  and  his  advice 
was  sought  by  Smt.  Gandhi  as  to  the  kind  of  speech 
she  should  make  on  the  radio  announcing  the  procla- 
mation of  Emergency.  Smt.  Gandhi,  Slid  Barooah  and 
Shri  Ray  worked  over  the  speech  and  this  exercise 
took  a  long  time — perhaps  about  three  hours.  This 
was  because  Shri  Sanjay  Gandhi  used  to  come  into  the 
room  and  ask  his  mother  to  come  out.  Smt.  Gandhi 
would  then  go  out  and  not  return  for  5  to  10  minutes, 
and  what  she  did  when  she  went  out,  Shri  Ray  did  not 
know.  After  finishing  the  speech  writing,  when  he 
was  going  out  through  the  door  of  the  room,  Shri  Ray 
heard  to  his  surprise  from  Shri  Om  Mehta  that  orders 
had  been  passed  to  loek-up  the  High  Courts,  the  next 
day  and  to  cut  off  the  electricity  connections  to  alJ 
newspapers.  Shri  Ray  was  surprised  because  he  had 
told  her  "that  under  the  Emergency  one  could  not 
take  any  action  unless  rules  were  framed,  Shri  Ray 
said  that  the  locking  up  of  the  High  Courts  and  cutting 
off  of  electricity  connections  could  not  just  happen  and 
he  told  that  to  those  ■  who  were  present  there.  He 
stayed  on  and  wanted  to  see  Smt.  Gandhi  and  convey 
to  her  iiis  reactions.  He  said  that  he  would  not  leave 
unless  and  until  she  saw  him  because  what  was  hap- 
pening was  important.  Smt.  Gandhi  was  late  in  com- 
ing and  while  he  was  waiting  Shri  Sanjay  Gandhi  met 
him  in  a  highly  excited  and  infuriated  state  of  mind 
and  told  him  quite  rudely  and  offensively  that  he  did 
not  know  how  to  rule  the  country.  Shri  Ray  did  not 
lose  his  temper  but  made  him  understand  that  he 
should  mind  his  own  business  and  should  not  try  to 
interfere  with  what  was  not  his  sphere.  Later  Smt. 
Gandhi  came  and  he  told  her  about  the  impending 
closure  of-  the  High  Courts  and  cutting  off  of  electri- 
city connections  to  newspapers.  Smt.  Gandhi  immedi- 
ately said  that  this  should  be  stopped. 

5.48  Shri  Om  Mehta  in  his  deposition  before  the 
Commissior,  has  stated  that  he  had  given  information 
to  Shri  Ray  in  the  Prime  Minister's  house  that  nteht 
regarding  the  intended  closure  of  the  courts  and  cutting 
off  of  electricity,  which  had  come  to  his  knowledge 
while  he  was  waiting  in  one  of  the  rooms  of  the  Prime 
Minister's  house  on  that  night. 

5.49  Shri  Brahmananda  Reddy,  the  then  Home 
Minister,  has  said  in  his  statement  that  he  was  called 
to  the  house  of  the  Prime  Minister  at  about  10.30  p.m. 
and  was  told  that  on  account  of  the  deterioratinji  law 


and  order  situation  it  was  felt  necessary  to  impose 
Internal  Emergency.  He  told  Smt.  Gandhi  that  there 
was  already  an  Emergency  on  and  that  the  powers 
already  available  under  the  existing  Emergency  could 
be  availed  of  to  deal  with  the  situation.  Thereafter, 
he  left,  but  he  was  sent  for  again  a  little  later  and  he 
was  told  by  Smt.  Gandhi  that  his  earlier  suggestion 
had  been  examined  and  it  was  found  that  the  declara- 
tion of  Internal  Emergency  was  considered  necessary. 
Shri  Brahmananda  Reddy  thereupon  told  her  to  do 
what  she  thought  was  best.  He  has  stated  that  on 
this  occasion  he  also  signed  a  letter  to  the  President 
of  the  Republic  making  reference  to  the  telephonic 
conversation  which  the  then  Prime  Minister  had  with 
the  President  and  appended  the  draft  proclamation  of 
Emergency  for  the  President's  assent  along  with  his 
letter.  The  letter  signed  by  Shri  Brahmananda  Reddy 
was  on  a  plain  sheet  of  paper  and  was  not  on  a  sheet 
with  the  letter-head  of  the  Home  Minister  of  India. 


5.50  Shri  Akhtar  Alam,  who  functioned  ate  the 
Special  Assistant  to  the  President  of  India,  has  stated 
that  an  important  letter  from  the  Prime  Minister's 
house  was  delivered  to  him  at  about  10.30  p.m.  on 
June  25,  1975,  and  that  he  delivered  it  to  the  Presi- 
dent, who  sent  for  his  Secretary,  Shri  K,  Balachandran 
and  also  Shri  Ncelkanlhan,  Deputy  Secretary,  who  dealt 
with  such  letters.  Some  discussion  ensued,  between  the 
President  and  the  Secretary  about  the  wording  of  the 
letter  about  which  Shri  Balachandran  raised  certain 
doubts.  At  about  11.20  p.m.,  Shri  Dhawan  came  and 
he  brought  with  him  some  papers.  He  says  that  he 
did  not  know  what  the  papers  were  and  he  did  not 
know  whether  the  President  signed  those  papers.  The 
next  morning  at  about  10.30  or  11  a.m.  Shri  Akhtar 
Alam  was  given  by  the  President  the  letter  from  the 
Prime  Minister  and  he  kept  it  in  his  custody  till  he 
handed  it  over  to  Shri  Balachandran  when  Shri  Akhtar 
Alam  left  the  post  in  February,  1977. 

5.51  Shri  K.  Balachandran  in  his  deposition  has 
referred,  to  the  top  secret  letter  received  from  the 
Prime  Minister  Smt.  Indira  Gandhi  to  the  President. 
This  letter  referred  to  the  discussion  which  the  Prime 
Minister  had  with  the  President  earlier  in!  the  day. 
She  had  stated  that  the  President  was  satisfied  on  the 
score  of  the  imminent  danger  to  the  security  of  India 
due  to  internal  disturbances.  She  had  also  stated  that 
if  the  President  was  satisfied  on  this  score,  a  procla- 
mation under  Article  352(1)  of  the  Constitution  had 
become  necessary;  and  that  she  was  enclosing  a  copy 
of  the  draft  proclamation  for  the  Presidents  consi- 
deration. Shri  Balachandran  has  stated  that  there  was 
no  draft  proclamation  enclosed  with  the  letter.  Accord- 
ing to  Shri  Balachandran  the  Prime  Minister  had  also 
stated  that  she  was  not  consulting  the  Cabinet  due  to 
shortage  of  time  and  the  matter  was  urgent;  and  that 
she  was,  therefore,  permitting  a  departure  from  the 
Transaction  of  Business  Rules  in  exercise  of  her 
powers  under  Rule  12  thereof.  According  to  Shri 
Balachandran  he  had  advised  the  President  that  it- 
would  be  Constitutionally  impermissible  for  him  to 
act  in  the  manner  suggested  in  that  letter;  and  that  he 
had  to  act  on  the  advice  of  his  Council  of  Ministers; 
and,  therefore,  his  personal  satisfaction  in  this  matter 
would  not  arise.     The  letter  from  the  Prime  Minister 


'.-■  ■  :^y        ~  •  -    :-:xl:\ ..-;,;.,<;  ,      .1      ,     .   .  -  ,_^^^vjaas»iaii2£a*»lifiij^,iaiiiiii^si*.,.. 


25 


indicated  that  the  Cabinet  had  not  considered  the 
matter.  Moreover,  it  was  worded  in  such  a  manner  as 
would  make  it  appear  that  the  decision  to  declare 
Emergency  was  that  of  the  President  based  on  his 
personal  satisfaction.  The  President,  apparently,  saw 
the  force  of  this  argument  and  contacted  the  Prime 
Minister  on  the  telephone  immediately  thereafter. 
Afterwards,  he  left  the  President's  room,  and  came 
back  after  about  10  minutes.  In  the' intervening  brief 
period,  Shri  Dhawan  had,  visited  the  President  and 
had  delivered  the  draft  of  the  proclamation  of  Emer- 
gency for  his  signature.  The  President  told  him  that 
he  had  signed  the  proclamation  and  given  the  same  to 
Shri  Dhawan,  who  had  taken  it  back,  with  him  along 
with  the  Prime  Minister's  letter.  The  next  day  Shri 
Akhtar  Alam  had  told  Shri  Balachandran  over  the 
telephone  that  a  revised  letter  had  been  received  Irom 
the  Prime  Minister,  which  was  subsequently  passed 
on  to  him  by  Shri  Akhtar  Alam  in  February  1977, 
and  he  kept  it  in  his  file. 

5.52  The  Prime  Minister's  letter  and  the  procla- 
mation of  Emergency  which  are  available  in  the 
President's  office  file  are  reproduced  below: — 

"TOP  SECRET 
PRIME  MINISTER 

INDIA 

NEW  DELHI  June  25,  1975. 

"Dear  Rashtrapatiji, 

! 

As  already  explained  to  you,  a  little  while 

ago,  information  has  reached  us  which  indicates 

that  there  is  an  imminent  danger  to  the  security 

,    of  India  being  threatened  by  internal  disturbance. 

.  The  matter  is  extremely  urgent. 

"I  would  have  liked  to  have  taken  this  to 
Cabinet  but  unfortunately  this  is  not  possible  to- 
night. I  am,  therefore,  condoning  or  permitting 
a  departure  from  the  Government  of  India 
(Transaction  of  Business)  Rule  1961,  as  amend- 
ed up-to-date  by  virtue  of  my  powers  .under  Rule 
12  thereof.  I  shall  mention  the  matter  to  the 
Cabinet  first  thing  tomorrow  morning. 

"In  the  circumstances  and  in  case  you  are 
so  satisfied,'  a  requisite  Proclamation  under  Arti- 
cle 352(1)  has  become  necessary.  I  am  enclos- 
ing a  copy  of  the  draft '  Proclamation  for  your 
consideration.  As  you  are  aware,  under  Article 
352(3)  even  when  there  is  an  imminent  danger 
of  such  a  threat,  as  mentioned  by  me,  the  neces- 
sary Proclamation  under  Article  352(1)  can  be 
issued. 

"I  recommend  that  such  a     Proclamation 
should  be  issued  tonight,  however,  late  it  may  be, 
■  and  all  arrangements  will  be  made  to  make  it 
public  as  early  as  possible  thereafter. 


With  kind  regards, 


Yours  Sincerely, 
(Sd/-    Indira    Gandhi)" 


"PROCLAMATION  OF  EMERGENCY 

In  exercise  of  the  powers  conferred  by  Clause 
1  of  Article  352  of  the  Constitution,  I,  Fakhruddin 
Ali  Ahmed,  President  of  India,  by  this  Proclama- 
tion declare  that  a  grave  emergency  exists  whereby 
the  security  of  India  is  threatened  by  internal 
disturbance. 

New  Delhi— 25th  June,  1975. 

PRESIDENT" 


5.53  On  the  basis  of  the  svidence  it  is  clear  that  . 
some  of  the  important  functionaries  in  the  Home 
Ministry,  Cabinet  Secretariat  and  the  Prime  Minister's 
Secretariat,  who  should  have  been  consulted  before 
such  an  important  decision  was  taken,  did  not  know 
anything  about  the  proclamation  of  Emergency  till 
Very  late  and  some  of  them  learnt  about  it  only  on 
the  morning  of  June  26,  1975. 

5.54  Shri  P.  N.  Dhar,  Secretary  to  the  Prime 
Minister,  in  his  statement  has  said  that  he  knew  about 
it  only  when  he  was  called  to  the  Prime  Minister's 
House  around  11.30  p.m.  on  June  25,  when  he  was 
given  for  perusal  the  draft  of  the  speech  that  the  Prime 
Minister  was  going  to  make  over  the  All  India  Radio. 

5.55  Shri  B.  D.  Pande,  the  Cabinet  Secretary,  recei- 
ved a  phone-call  from  the  Prime  Minister's  House  at 
about  4.30  a.m.  on  June  26,  and  was  told  that  a 
Cabinet  meeting  was  scheduled  to  take  place  at  6  a.m. 
that  morning.  He  knew  about  the  proclamation  of 
Emergency  for  the  first  time  that  moiuing  only.  He 
was  surprised  as  to  how  and  who  functioned  to  bring 
about  the  large  number  of  arrests  Which  had  taken 
place  between  25th  and  26th  June,  Normally,  all 
instructions  for  such  .expeditious  actions  were  routed 
through  the  Ministry  of  Home  Affairs  which  used  then- 
own  channels  of  communications. 

5.56  According  to  Shri  B*  D.  Pande,  the  need 
for  the  declaration  of  emergency  or  the  situation  in 
the  country  warranting  any  such  declaration  had  not 
figured  in  any  of  the  Cabinet  meetings  preceding 
June  26,  1975. 

5.57  Shri  Atma'  Jayaram,  Director,  Intelligence 
Bureau,  has  stated  that  he  learnt  about  the  proclama- 
tion of  Emergency  only  after  he  went  to  the  office  on 
June  26th. 

5.58  Shri  S.  L.  Khurana,  who  was  the  Home  Secre- 
tary to  the  Government  of  India,  had  known  about  it 
only  when  he  attended  the  Cabinet  meeting  on  26th 
morning  for  which  he  received  intimation  past  6  a.m. 
Accordingly,  he  arrived  at  the  Cabinet  meeting  only 
around  6.30  a.m.  when  the  meeting  was  already  on. 

5.59  Shri  H.  R.  Gokhale,  former  Minister  of  Law 
and'  Justice,  came  to  know  about  the  proclamation  of 
Emergency' for  the  first  time  at  the  Cabinet  meeting 
held  on  the  morning  of  June  26,  "1975.  Neither  he 
nor  his  Ministry  was  consulted  with  regard  to  the 
proclamation  of  Emergency  at  any  time  before,  nor 
was  the  proclamation  vetted  by  him  or  by  his  Ministry. 


26 


5.60  Some  of  the  special  features  of  the  proclama- 
tion of  Emergency,  as  gathered  from  the  official  re- 
cords, are  as  follows  : — 

(a)  on  the  economic  front  there  was  nothing 
alarming.  On  the  contrary,  the  whole-sale 
price  index  had  declined  "by  7.4  per  cent 
between  December  3,  1974  and  the  last 
week  of  March.  1975  as  per  the  Economic 
Survey  1975-76,  a  Government  of  India 
Publication; 

(b)  on  the  law  and  order  front,  the  fortnightly 
reports  sent  by  the  Governors  of  various 
States  to  the  President  of  India  and  by  the 
Chief  Secretaries  of  the  States  to  the  Union 
Home  Secretary  indicated  that  the  law  and 
order  situation  was  under  complete  control 
all  over  the  country; 

(c)  the  Home  Ministry  had  received  no  reports 
from  the  State  Governments  indicating  any 
significant  deterioration  in  the  law.  and  order 
situation  in  the  period  immediately  preceding 
the  proclamation  of  Emergency; 

(d)  the  Home  Ministry  had  not  prepared  any 
contingency  plans  prior  to  June  25,  1975, 
with  regard  to  the  imposition  of  internal 
Emergency; 

(e)  the  Intelligence  Bureau   had   not  submitted 
{<          :    any  report  to  the  Home  Ministry  any  time 

:-,?,  between   12th  of  June   and  25th   of  June, 
•!■  1975,  suggesting  that  the  internal  situation 

in  the  country  warranted  the  imposition  of 
internal  Emergency; 

(f)  the  Home  Ministry  had  not  submitted  any 
report  to  the  Prime  Minister  expressing  its 
concern  or  anxiety  about  the  internal  situa- 
tion in  the  country.  Till  after  the  Emergency 
was  lifted,  the  Home  Ministry  did  not  have 
on  its  file  the  copy  of  the  communication 
which  was  sent  by  the  Prime  Minister  to 
the  President  recommending  imposition  of 
the  Emergency; 

(g)  while  the  Director  of  Intelligence  Bureau, 
the  Home  Secretary,  the  Cabinet  Secretary 

.  and  the  Secretary  to  the  Prime  Minister  had 
not  been  taken  into  confidence,  Shri  R,  K. 
Dhawan,  the  then  Additional  Private  Secre- 
tary to  the  Prime  Minister  had  been  asso- 
ciated with  the  preparation  and  promulgation 
of  the  Emergency  right  from  the  early 
stage; 

(h)  Shri  Om  Mehta,  the  then  Minister  of  State 
in  the  Ministry  of  Home  Affaire,  appears  to 
have  been  taken  into  confidence  much  earlier 
than  the  Home  Minister,  Shri  K.  Brahma- 
nanda  Reddy,  who  came  into  the  picture 
only  when  the  draft  proclamation  was 
forwarded  to  the  President; 

(i)  while  the  Lt.  Governor  of  Delhi  and  the 
Chief  Minister  of  Haryana,  Punjab,  Madhya 
Pradesh,  Rajasthan,  Kamataka,  Andhra 
Pradesh,  Bihar  and  West  Bengal  had  been 
given     advance    intimation  by  the    Prime 


Minister  about  the  contemplated  action,  no 
such,  advance  information  was  given  to  the 
Governments  of  U.P.,  Maharashtra,  Gujrat, 
Tamil  Nadu,  J&K,  Tripura,  Oi'issa,  Kerala, 
Meghalaya  and  other  Union  Territories.  In 
tact,  Shri  H.  N.  Bahuguna,  the  then  Chief 
Minister  of  Uttar  Pradesh  has  stated,  in  his 
affidavit  that  he  came  to  know  about  the 
.proclamation  of  Emergency  on  the  morning 
of  June  26,  when  he  was  having  break-fast 
along  with  Shri  Uma  Shankar  Dikshit  and 
Shri  Xeshav  Deo  Malaviya,  the  Central 
Ministers,  and  they .  were  as  surprised  as  he 
was  about  the  promulgation  of  Emergency. 

■5.61  As  stated  earlier,  a  notice  under  rule  5(2)(a) 
of  the.  Commissions  of  Inquiry  Rules  was  issued  to 
Smt.  Gandhi  requesting  her  to  file  her  statement  in 
terms  of  rule  5{3).  No  such  statement  was  filed  by 
her.  Smt.  Gandhi  was  also  issued  a  summons  under 
section  8B  of  the  Commissions  of  Inquiry  Act.  Though  - 
she  responded  to  the  summons  under  section  8B  of 
(he  Act,  she  declined  to  take  oath  and  give  evidence 
on  oath  when  the  Commission  desired  to  examine  her 
under  section  5(2)  and  according  to  the  procedure 
analogous  to  the  provisions  of  the  Civil  Procedure 
Code.  But  iu  one  of  the  letters  addressed  by  her  to 
the  Commission,  dated  November  21,  1977,  in  res- 
ponse to  the  invitation  which  was  initially  extended 
to  her  to  assist  the  Commission,  Smt.  Gandhi  had 
submitted  a  detailed  reply  to  the  Commission  in  regard 
to  certain  matters  and,  inter  alia,  raising  certain 
objections  to  the  procedure  adopted  by  the  Commission. 
In  the  course  of  her  reply,  she  touched  on  the  subject 
of  declaration  of  Emergency  and  stated  : 

"I  should  further  like  to  point  out  that  the  terms 
of  reference  of  this  Hon'ble  Commission 
are  one-sided  and  politically  motivated. 
While  they  empower  the  Hon'ble  Commis- 
sion to  enquire  into  the  excesses  committed 
during  the  emergency,  they  are  silent  about 
the  circumstances  which  led  to  its  declarar 
tion.  This  country  is  vast  and  beset  with 
deep-rooted  and  wide-ranging  problems, 
The  administrative  machinery  is  fragmented. 
Urgent  measures  have  to  be  taken.  Pro- 
grammes are  implemented  at  various  levels 
and  by  different  individuals  and  <  agencies. 
Some  excesses  in  their  implementation  can- 
not always  be  avoided  nor  do  they  always 
come  to  notice  at  that  time.  I  have  publicly 
expressed  regret  for  any  unjust  hardship 
caused  to  any  individual.  But  if  the  pro- 
fessed purpose  of  the  inquiry  is  to  check 
abuse  of  power  in  the  future,  it  is  equally 
imperative  that  the  circumstances  which 
created  chaotic  conditions  in  the  nation  before 
the  emergency  should  also  be  enquired  into 
and  not  allowed  to  be  repeated.  For  two , 
years  preceding  the  emergency  the  country 
was  in  the  grip  of  grave  crisis.  The  econo- 
mic situation  had  deteriorated  due  mainly  to 
internal  and  international  causes  beyond  our 
control.  Interested  parties  and  groups  wished 
deliberately  to  aggravate  the  situation  for 
their  own  gain.  Freedom  of  speech  and 
expression  were  used  to  spread  hatred  and 


.^WV:;^:.    ■  .-'..-«,:.  ■■."■vr^.    :-■  v-;<;^, .,.;...-.  :r>Tvrr..,^:,   .. 


,:.  •  rsa»TiC?,::-'i'33®J"3^iE3SaSi 


r;aww,ii?rf.;iwpr^»'|!!e?!^WS!5"ra 


27 


parochial  regional  sentiments.  Noble  insti- 
tutions of  learning  were  turned  into  hot-beds 
of  political  intrigue.  Public  property  was 
destroyed  at  the  slightest  excuse.  A  Minister 
in  the  present  cabinet  is  reported  to  have 
proudly  claimed,  "la  November  last  (1975) 
in  the  Union  State  of  Karnataka  alone,  we 
caused  derailment  of  52  trains".  The  attempt 
was  to  paralyse  national  life.  The  dissolu- 
tion of  the  Gujrat  Assembly  was  forced  by 
undemocratic  means.  Duly  elected  legislators 
were  beaten  and  intimidated  into  resigning 
from  their  seats  in  the  Assembly. 

"Relying  upon  the  judgment  of  the  Allahabad  High 
Court,  the  demand  for  my  resignation  was 
made  in  the  name  of  democracy  and  mora- 
lity. But  what  was  that  morality  and  how  did 
democracy  come  in  ?  If  at  all,  moral  consi- 
derations were  on  my  side  as  nothing  had 
been  found  by  the  High  Court  against  me 
which  smacked  of  moral  turpitude.  I  had 
lost  on  a  legal  technicality  but  law  also  gave 
me  the  right  to  reconsideration  of  the  judg- 
ment by  the  highest  court.  And  the  act  of 
seeking  to  remove  a  duly  elected  leader  of 
the  majority  party  through  threats  to  gheraO 
me  and  with  a  call  to  the  Army  and  the 
Police  to  revolt  could  not  be  justified  in  the 
flame  of  any  known  democratic  principles. 
A  chaotic  state  of  affairs  similar  to  that  in 
India  before  July  1975  prevailed  in  France 
when  de  Gaulle  came  to  power  in  1958. 
His  major  response  was  constitutional  reform 
and  the  introduction  of  Article  16  in  the 
new  Constitution  which  goes  a  long  way  to 
show  how  necessary  it  became  for  my  govern- 
ment to  resort  to  the  emergency  provisions 
.in  the  Constitution  if  India  were  to  pull 
:  -  herself  out  of  the  impending  disaster.  The 
flew  Article  provided  inter  alia  that  "when 
the  regular  functioning  of  the  constitutional 
governmental  authorities  is  interrupted,  the 
President  of  the  Republic  shall  take  the 
measures  commended  by  the  circumstances" 
to  restore  order. 

"It  must  also  be  borne  in  mind  that  it  would  be 
impossible  for  a  democratically  elected 
government  to  function  effectively  if  it  is  to 
live  under  the  fear  of  politically  .  insrnred 
inquisitorial  proceedings  against  its  policies 
and  decisions  by  a  subsequent  government." 

.5.62  Smt.  Gandhi  sent  yet  another  reply  dated 
December  2,  1977,  in  response  to  another  invitation, 
which  was  extended  to  her  by  the  Commission  when 
the  case  dealing  with  the  circumstances  leading  to  the 
declaration  of  Emergency  was  coming,  up  for  the  First 
Stage  of  its  hearing  before  the  Commission  from 
December  5,  1977  and  the  following  days.  The  relevant 
portions  of  her  reply  are  reproduced  below  : 

"In  fact,  that  the  declaration  of  Emergency, 
according  to  this  Hon'ble  Commission, 
might  be  an  excess  and,  therefore,  calls  for 
an  inquiry,  is  a  matter  which  does  not  fall 
within  the  purview  of  this  Hon'ble  Com- 
mission.    The  proclamation  of  Emergency 


by  the  President  was  a  Constitutional  step. 
It  was  approved  by  the  Cabinet  and  duly 
ratified  by  both  Houses  of  Parliament  in 
terms  of  Article  352(2)  of  the  Constitution. 
After  the  ratification,  the  proclamation  which 
was  political  in  character,  became  an  Act 
of  Parliament.  ,  In  the  United  States  the 
exercise  of  political  power  by  the  President 
has  been  held  to  be  beyond  challenge.  Chief 
Justice  Marshall  observed  in  Marbury  v. 
Madison  : 

"By  the  Constitution  of  the  United  States  the 
President  is  invested  with  certain  impor- 
tant political  powers  in  the  exercise  of 
which  he  is  to  use  his  own  discretion,  and 
is  accountable  only  to  his  country  in  his 
political  character  and  to  his  own  cons- 
cience     The  Subjects  are 

political.  They  respect  the  nation,  not 
individual  rights,  and  being  entrusted  to 
the  Executive,  the  decision  of  the  Executive 
is  conclusive.'' 

"Under  the  Indian  Constitution,  on  the  other  hand, 
the  proclamation  of  Emergency  has  been 
made  subject  to  ratification  by  parliament. 

No  authority  in  this  country,  not  excluding  any 
commission  appointed  under  the  Com- 
missions of  Inquiry  Act,  can  sit  in  judgment 
over  such  an  Act  of  Parliament.  For  any 
political  decision,  the  Government  under  our 
Constitution  is  answerable  only  to  Parlia- . 
ment.  Jf  this  Hon'ble  Commission  arrogates 
to  itself  the  power  to  determine  that  the. 
declaration  of  Emergency  was  an  excess, 
this  Hon'ble  Commission  will  not  only  be 
stultifying  the  Constitutional  Scheme,  but' 
also  establishing  a  precedent  which  will  make 
serious  inroad  into  Parliamentary  supremacy 
with  disastrous  consequences  to  Parlia- 
mentary freedom.  Even  the  terms  at 
reference  of  this  Hon'ble  Commission  do  not 
warrant  such  an  inquiry.  They  are  strictly 
confined  to  the  determination  of  ""alleged 
excesses  during  the  emergency  or  in  the  days 
immediately  preceding  it; 

But  apart  from  this,  I  should  like  to  bring  to  the 
notice  of  the  Hon'ble  Commission  that  while 
making  its  pronouncement  on  my  submission 
that  the  terms  of  reference  were  one-sided 
and  politically  motivated  and  that  it  was 
equally  imperative  that  this  Hon'ble  Com- 
mission should  go  into  the  circumstances 
which  led  to  the  declaration  of  Emergency, 
this  Hon'ble  Commission  observed  as 
follows: 

'But  one  thing  I  propose  to  bring  to  the  notice, 
I  am  only  concerned  with  the  declaration 
of  Emergency,  if  it  amounts  to  an  excess 
and  not  otherwise.  If  on  consideration  of 
the  material  before  me,  I  am  prima  facie 
of  the  view  that  declaration  of  Emergency 
could  be  regarded  as  an  excess,  an  inquiry 
in  open  will  te  made.  If,  however,  there 
is  nonsuch  view  formed  by  me,  no  such 
inquiry  will  be  made.' 


28 


"This  observation  of  the  Hon'ble  Commission, 
I  most  respectfully  submit,  is  not  sustainable. 
In  the  first  place  it  is  tantamount  to  saying  : 
There  shall  be  an  inquiry  into  the  declaration 
of  Emergency  if  I  can  be  damned  in  the 
process,  but  there  shall  be  no  inquiry  if  others 
whose  actions  justified  the  declaration  of 
Emergency,  .are  lively  to-  be  damned. 
Secondly,  it  is  difficult  to  imagine  how  this 
Hon'ble  Commission  can  take  any  decision 
regarding  the  declaration  of  Emergency  with- 
out full  consideration  of  the  range  of  circum- 
stances and  incidents  which  had  accumulated, 
for  a  long  time  preceding  the  proclamation, 
into  an  imminent  threat  to  paralyze  duly 
elected  Governments  at  the  Centre  and  in 
the  States. 

During  that  period,  ostensibly  the  attacks  were 
concentrated  upon  me.  In  reality  the  politi- 
cal opposition  had'  been  using  this  strategy 
to  weaken  the  Central  Government  and 
subvert  its  socialist  and  progressive  pro- 
grammes for  quite  some  years,  It  was  a 
question  of  change  versus  the  status  quo. 
Secular,  democratic  socialism  on  the  one 
hand  and  retrograde,  communal  and  capi- 
talistic forces  on  the  other  had  been  struggling 
against  each  other  to  gain  the  upper  hand. 
The  split  in  the  Congress  in  1969  gave  an 
edge  to  this  confrontation.  The  nationalisa- 
tion of  banks  and  other  measures  which 
disturbed  entrenched  privileges  and  vested 
interests,  and  offered  opportunity  and  help 
to  the  poor  and  weaker  sections  of  our 
society,  created  such  tremendous  popular 
upsurge  that  communal  and  capitalistic 
elements  probably  lost  all  hope  of  being  able 
to  successfully  fight  on  an  ideological  plane. 
Hence  they  changed  their  methods.  Similar 
such  political  phenomenon  was  not  peculiar 
to  India.  Recent  history  is  replete  with  such 
instances. 

The  vicious  campaign  of  character  assassination 
and  denigration  waged  by  political  opponents 
denuded  Indian  politics  of  all  ideological 
debates.  Even,  in  the  1971  Lok  Sabha 
elections,  the  opposition  did  not  put  forth 
■  any  alternative  economic  or  social  pro- 
gramme. I  was  the  focus  of  attack  as  the 
first  target.  Ordinary  human  decency  was 
lost  in  the  process.  Their  decisive  defeat 
at  the  polls  frustrated  their  faith  in  the 
democratic  process.  There  was  then  a  short 
interlude  durine  which  India  faced  one  of 
the  gravest  challenges  with  which  any  nation 
has  been  confronted.  The  influx  of  ten  mil- 
lion refugees  from  Bangladesh,-  aggression 
and  the  subsequent  war,  unprecedented 
country-wide  drought  and  the  ajobal  infla- 
tionarv  spiral  aggravated  by  the  oil  crisis, 
■  and  other  factors  would  have  upset  the  eco- 
nomic balance  of  anv  rich  and  developed 
country.  ^  India  was  fiehfins  for  her  econo- 
mic survival.  Tt  was  durine  this  period  that 
the  then  Opposition  resorted  to  extra-consti- 
tutional means' tp  paralyse'  our  democratic 


institutions.  As  I  have  explained. in  my  pre- 
vious statement,  there  was  hardly  any  sphere 
of  national  life  which  was  not  sought  to  bs 
disrupted. 

The  inevitable  distress  of  many  sections  of  our 
people  was  exploited  to  mount  attacks 
on  duly  elected  Governments  and  Assemblies 
of  the  day.  We  cannot  forget  the  tragic 
circumstances  leading  to  the  dissolution  of 
the  Gujrat  Assembly  only  a  few  months 
after  its  constitution. 

It  was  in  this  political  atmosphere  prevailing  in 
the  country  that  the  judgment  of  the  Allaha- 
bad High  Court  was  delivered  and  was  seized 
upon  by  the  opposition  to  whip  up  political 
frenzy  against  me.  Although  I  was  in  the 
immediate  target,  the  real  design  was  to 
dislodge  the  Congress  Government  and  to 
capture  power  through  extra-constitutional 
means.  If  a  duly  elected  Government  can 
be  allowed  to  be  pulled  down  by  threats  of 
violence  and  demonstrations  in  the  streets 
and  by  incitement  of  the  army  and  the  police 
to  revolt,  the  democratic  structure  of  the 
nation  would  collapse.  Tn  1958,  while 
putting  the  case  for  constitutional  reform  the 
French  Prime  Minister,  M.  Gallard  said, 
"Democracy  is  only  in  consequence  an 
anarchy  if  those  who  hold  power  by  the 
will  of  the  majority  do  not  also  enjoy  an 
authority  corresponding  to  the  responsibilities 
which  they  assume." 

"As  Prime  Minister  of  the  country  I  could  not 
abdicate  my  responsibility  to  stem  the 
impending  disaster  merely  for  fear  that  my 
motive  in  proclaiming  the  emergency  could 
be  suspected.  When  the  democratic  institu- 
tions of  a  nation  are  held  to  ransom,  and  the 
Government  of  the  day  rises  to  the  occasion 
to  meet  the  challenge,  certain  freedoms  of 
some  individuals  might  be  affected.  That 
in  fact  is  the  rationale  behind  Article  352  of 
the  Constitution  which  authorises  the  decla- 
ration of  Emergency,  Emergency  was  not 
intended  to  cause  suffering  and  I  have 
expressed  deep  sorrow  for  any.  hardship 
caused. 

It  may  not  be  out  of  place  to  draw  the  attention ' 
of  this  Hon'ble  Commission  to  the  present 
Prime  Minister,  Shri  Morarii  Desai's  recent 
.  observations  in  the  Rajya  Sabha  that  there 
was  "nothing  like  absolute  right  to  anybodv." 
.  "Every  rieht  is  subject  to  the  right  of  the 
whole  society.  If  the  rights  of  the  whole 
society  are  in  danger,  the  Government  As 
bound  to  take  action  to  prevent  that  danger." 

In  these  circumstances,  the  Hon'ble  Commis- 
sion's predetermination  of  certain  dates 
while  circumscribinfi;  the  scope  of  its  inquiry, 
belies  reality.  It  has  been  repeatedly  pro- 
claimed by  members  of  the  present  Union 
Government  that  it  was  aljeeedlv  because  of 
the  Allahabad  High  Court  Judgement  of  the 
12th  June,  1975.  and  the  Qualified  stay  given 
by  the  Supreme  Court  on  22nd  of  June,  that 


""       ~ T  .  „-,  „.,  '■■.:<££.■■  ...'iiiiaiis      ^.'MiJ    J!'j   S3    SsifaaiS   sS   S 


29 


the  Emergency  was  declared  for  personal 
reasons,  namely,  to  stultify  the  judgment  by 
extra-legal  means  and  to  maintain  my  posi- 
tion as  Prime  Minister  by  extra-constitutional 
methods.  I  have  to  point  out,  with  utmost 
respect,  that  the  Commission  appears  Lo 
have  projected  the  theory  propagated  by  my 
political  opponents. 

By  putting  the  inquiry  beforehand  into  a  prede- 
termined chronological  matrix  the  evidence 
would  naturally  proceed  under  the  condi- 
tioning of  this  predetermined  matrix,  and 
this  untested  material  will  be  systematically 
publicised  to  make  it  appear  as  proof.  .  This, 
in  my  humble  opinion,  directly  defeats  the 
ends  of  justice." 

5.63  In  response  to  the  Commission's  inquiry,  the 
Cabinet  Secretariat  has  brought  to  the  notice  of  the 
Commission  the  relevant  portions  of  the  Government 
of  India  (Transaction  of  Business)  Rules,  1961.  Rule  7 
of  these  Rules  reads  as  follows  : 

"All  cases  specified  in  the  Second  Schedule  to 
these  Rules  shall  be  brought  to  the  Cabinet," 

5.64  Clause  (da)  of  the  Second  Schedule  of  '  the 
Government  of  India  (Transaction  of  Business)  Rules, 
1961,  reads  as  follows  : 

"(da) — Cases  relating  to  a  proclamation  of  emer- 
gency under  Articles  352  to  360.  of  the 
Constitution  and  other  matters  related 
thereto." 

5.65  In  the  light  of  the  foregoing  rule,  it  is  not 
understood  how  this  provision  could  have  been  circum- 
vented by  the  application  of  Rule  12  of  the  same 
Transaction  of  Business  Rules.  Rule  12  of  the  Govern- 
ment of  India  (Transaction  Of  Business)  Rules  reads 
as  follows : 

"12.  Departure  from  Rules  :  The  Prime  Minister 
may,  in  any  case  or  classes-of  cases,  permit 
or  condone  a  departure  from  these  rules  to 
the  extent  he  deems  necessary." 

5.66  s In  this  context,,  the  following  information 
furnished  by  the  Cabinet  Secretariat  regarding  the 
Transaction  of  Business  is  relevant  to  the  issue  : 

"The  business  of  the  Government  is  transacted  in 
accordance  with  the  Transaction  of  Business 
Rules  and  the  Allocation  of  Business  Rules, 
both  of  which  have  been  promulgated  under 
Article  77  of  the  Constitution.  The  Alloca- 
tion of  Business  Rules  provide  that  the 
business  of  the  Government  shall  be  transact- 
ed in  the  Ministries,  Departments,     Secre- 

.  ■»  tariats  and  Offices  specified  in  .  the     First 

Schedule  to  these  rules.  The  distribution  of 
subjects  among  the  departments  is  specified 
in  the  Second  Schedule  to  these  rules.  While 
the  President  can,  on  the  advice  of  the 
Prime  Minister,  change  the  allocation  of 
business  between  departments,  nothing  in  the 
rules  seems  to  provide  for  the  Prime  Minis- 
ter's Secretariat  transacting  any  business 
allotted  to  a  particular  Ministry. 

S/39  HA/77— 5 


By  virtue  of  entry  27  under  the  Home  Ministry, 
matters  relating  to  the  emergency  provisions 
of  the  Constitution  (other  than  financial 
emergency)  are  to  be  dealt  in  the  Home 
Ministry.  This,  read  with  Rule  3  of  the 
Transaction  of  Business  Rules,  therefore, 
requires  that  all  business  pertaining  to  the 
emergency  provisions  shall  be  transacted  in 
the  Home  Ministry,  with  cases  relating  to 
the  proclamation  of  Emergency  being 
brought  before  the  Cabinet. 

The  normal  procedure  for  submissiort  of  cases  to 
the  Cabinet  is  for  the  Ministry  concerned  to 
send  a  Note  for  the  Cabinet  to  the  Cabinet 
Secretariat.  This  note  contains  the  proposal 
needing  Cabinet  approval  and  should  have  the 
approval  of  the  Minister  concerned.  There- 
after the  item  is  placed  before  the  Cabinet  and 
approval,  if  accorded,  is  conveyed  to  the 
Ministry  by  the  Cabinet  Secretariat.  If  time 
is  short,  the  Cabinet  Secretariat  obtains  the 
approval  of  the  Prime  Minister  under  Rule  12 
of  the  Transaction  of  Business  Rules,  and 
thereafter  authorises  the  Ministry  concerned 
to  proceed  further  in  the  matter." 

"Since  the  Home  Ministry  has  allotted  the  work 
relating  to  the  Emergency  provisions  of  the 
Constitution,  proposals  relating  to  the  pro- 
clamation of  Emergency  should  normally 
originate  from  that  Ministry.  This  would  be 
particularly  so  when  the  Emergency  is  -to  be 
declared  on  grounds  of  internal  disturbances, 
as  the  Home  Ministry  deals  With  the  Intelli- 
gence Bureau,  Preventive  detention  and 
National  Integration.  It  is  the  Home  Ministry 
which  is  in  touch  with  the  State  Governments 
on  matters  relating  to  law  and  order.  The 
Cabinet  Secretariat  did  not.  however,  receive 
any  proposals  from  the  Home  Ministry  in 
respect  of  the  Proclamation  issued  on  the 
25th  of  June." 

5.67  It  may  be  pointed  out  that  even  in  1971 
when  a  war  was  being  waged  with  Pakistan,  a  pro- 
clamation of  Emergency*  was  issued  without  invoking 
Rule  12  of  the  Transaction  of  Business  Rules.  A 
regular  meeting  of  •  the  Council  of  Ministers  was 
convened  and  the -Proclamation  was  issued  thereafter, 
after  obtaining  clearance,  from  the  Home  Ministry. 
The  Cabinet  Secretariat  conveyed  to  the  Home  Ministry 
the  authorisation  to  issue  the  proclamation.  Thereafter, 
the  Presidential  proclamation  was  issued. 

5.68  The  circumstances  leading  to  the  declaration 
of  Emergency  pursuant  to  the  advice  of  the  Prime 
Minister  leave  little  room  for  doubt  that  the  decision 
to  impose  Emergency,  when  there  was  already  in  exist- 
ence an  Emergency  proclaimed  as  early  as  1971,  was 
exclusively  the  decision  of  the  Prime  Minister.  None 
of  her  Cabinet  Ministers,  except  Shri  Brahmananda 
Reddy  was  even  aware  of  the  proposal  to  advice  the 
President  pursuant  to  which  a  declaration  of  Emergency 
was  to  be  made.  Even  Shri  Brahmananda  Reddy„ 
Home  Minister,  was  not  consulted;  but  he  was  merely 
informed  shortly  before  the  advice  was  tendered  and 


30 


his  ^assistance  was  taken  only  for  -  obtaining  a  letter 
from1  him  intimating  tie  decision  of  Smt.  Gandhi  and 
for  forwarding  the  draft  Proclamation  to  the  President, 
pursuant  to  which  the  declaration  of  Emergency  was 
issued.  This  assistance  of  Shri  Brahmanauda  Reddy 
appears  to  have  been  taken  only  as  a  matter  of  form 
and  merely  because  his  assistance  was  perhaps  required 
to  formally  forward  the  draft  Proclamation  to  the 
President. 

5.69  It  is  necessary,  however,  to  say  -something 
about  the  Internal  Emergency,  which  was  declared. 
Under  Article  352,  as  it  stood  on  the  relevant  date, 
"(1)  If  the  President  is  satisfied  that  a  grave  emer- 
gency exists  whereby  the  security  of  India  or  of  any 
part  of  the  territory  thereof  is  threatened,  whether  by 
war  of  external  aggression  or  internal  disturbance,  he 
may,  by  Proclamation,  make  a  declaration  to  tfiat 
effect".  The  condition  on  which  an  Emergency  may 
be  proclaimed  is  :  the  satisfaction  of  the  President  that 
emergency  exists  whereby  the  security  of  India  or  any 
part  of  the  territory  of  India  is  threatened,  whether 
(a)  by  war,  or  (b)  by  external  aggression,  or  (c)  by 
internal  disturbances.  The  satisfaction  may  be  based 
on  any  one  or  more  of  the  three  grounds.  The  decla- 
ration of  Emergency  by  the  President  has  no  different 
effect  according  as  the  satisfaction  of  the  President 
depends  upon  the  existence  of  the  State  of  war  or  of 
external  aggression  or  of  internal  disturbance.  Once 
a  declaration  of  Emergency  is  made  on  satisfaction 
of  one  or  more  of  the  grounds,  the  consequences  des- 
cribed by  Articles  353  and  358  come  into  operation. 
It  is  open  to  the  President  to  declare  that  the  right 
to  move  the  court  for  enforcement  of  any  of  the  rights 
conferred  by  Part  III  of  the  Constitution  as  may  be 
mentioned  in  the  order  shall  remain  suspended  for 
the  period  during  which  the  proclamation  is  in  force, 
or  for  such  shorter  period  that  may  be  specified  in 
the  order.  The  Constitution  contemplates  declaration 
of  only  one  Emergency,  whether  the  satisfaction  of  the 
President  depends  upon  the  existence  of  Emergency 
arising  out  of  war  or  out  of  external  aggression  or  in- 
ternal disturbance.  The  Emergency  declared  has  no 
different  qualities  or  connotations,  according  as  the 
ground  on  which  the  President  is  satisfied,  depends 
upon  the  existence  of  war  or  external  aggression  or 
internal  disturbances.  It  may  be  recalled  that  there 
was  an  Emergency  already  declared  and  was  in  opera- 
tion since  December  1971.  .  That  Emergency  had 
never  been  withdrawn.  The  Defence  of  India  Rules 
were  in  operation  as  promulgated  under  the  Defence 
of  India  Act  enacted  as  an  aftermath  of  the  Emergency. 
The  provisions  .of  Article  358,  by  which  the  funda- 
mental rights  under  Article  19  were  suspended,  were 
also  in  operation.  The  Constitution,  in  the  opinion  of 
the  Commission  does  not  contemplate  the  issue  of  an 
Emergency  upon  an  Emergency  already  existing,  nor 
prevents  the  courts  from  entertaining  any  challenge  to 
fee  declaration  of  this  additional  Emergency.  But 
the  provisions  of  the  Constitution  were  amended  by 
the  39th  Amendment  of  the  Constitution  Act,  which 
prevented  a  challenge  being  raised.  But  even  when 
there  was  already  in  existence  and  in  operation  an 
Emergency  under  which  powers  could  be  exercised, 
another  Emergency  was  declared  and  the  original  Rules' 
i.e.,  Defence  of  India  Rules  were  modified  as  Defence 
and  Internal  Security  of  India  Rules,  1975. 


5.70  This  was  more  in  the  nature  of  a  shock  treat- 
ment, than  a  legally  permissible  Emergency,  which 
could  be  declared  according  to  the  law  then  in  force. 

5.71  If,  however,  an  Internal  Emergency  could  be 
declared  apart  from  the  External  Emergency,  the 
powers  which  were  exercised  before  any  Rules 'were 
framed,  i.e.  disconnecting  the  electricity  connections  of 
newspaper  offices  were  wholly  unauthorised,  since 
there  was  no  law  which  conferred  upon  any  authority 
such  power.  Again,  the  action  taken  by  the  autho- 
rities under  the  directions  of  the  Prime  Minister  to 
arrest  a  number  of  political  leaders  was  not  supported 
by  anytlasy.  As  will  be. pointed  out  hereafter,  orders 
could  Sffwere,  in  facPJassued  under  the  Maintenance 
of  Internal  Security  Act  or  any  other  statutory  provi- 
sion by  any  authority  competent  in  that  behalf  after 
due  satisfaction  on  matters  submitted  before  that 
authority.  Prima  jacie,  therefore,  the  disconnection  of 
electricity  connections  of  a  number  of  newspapers  and 
orders  for  arrests  of  a  number  of  political  leaders  and 
others  without  complying  with  the  requirements  of 
law,  was  unauthorised  and  amounted  to  wrongful 
arrests  and  detentions;  and  the  disconnection  of  the 
electricity  was  against  the  provisions  of  the  Indian 
Electricity  Act,  1910. 

5.72  It  may  be  necessary  also  to  mention  that  the 
conclusions  arrived  at  by  the  Intelligence  Bureau  after 
mounting  surveillance  upon  political  leaders  and  others, 
including  tapping  of  their  telephones  raise  a  grave  issue 
of  public  interest.  It  has  relevance  to  the  assault  on 
the  liberty  of  an  individual,  which  in  a  democratic 
country  has  very  great  importance  and  significance.- 
Even  the  Ministers  of  the  Government  were  not  spared 
in  the  action  taken  by  the  Intelligence  Bureau.  They 
were  subjected  to  the  indignity  of  being  shadowed  and 
their  telephones  were  tapped.  Such  a  power,  if  at 
all,  could  be  exercised  only  when  authorised  by  statu- 
tory provisions  arid  circumstances  strictly  necessary  for 
ensuring  the  security  of  the  Stale  in  grave  times  either 
of  internal  disturbance  or  external  aggression  or  war 
and  not  at  other  times.  On  the  materials  placed 
before  the  Commission,  there  does  not  appear,  to  be 
any  statutory  authority  pursuant  to  which  this  action, 
of  the  Intelligence  Bureau  was  taken.  In  his  state- 
ment to  the  Commission,  Shri  Atma  Jaya  Ram,  the 
then  Director,  Intelligence  Bureau,  has  stated  that  "if 
was  the  normal  or  usual  practice  to  give  such  intelli- 
gence orally  or  in  writing".  Such  action  does  not 
appear  to  be  justified  by  the  existence  of  any  circums- 
tance necessary  for  ensuring  the  security  of  the 
State  against  External  aggression,  war  or  internal 
Emergency. 

5.73  As.  already  submitted,  it  is  for.  the  Government 
to  decide  whether  or  not  the  Intelligence  Bureau  may 
be  used  for  collecting  information  for  purposes  other 
than  those  strictly  necessary  for  the  security  of  the 
State.  It  would  certainly  be  a  travesty  of  the  demo- 
cratic institutions  if  the  Government  constituted  by  a 
political  party  is  entitled  to  watch  the  activities  of  other 
political  parties  and  even  of  members  of  its  own  party. 
If,  however,  such  power  is  to  be  conferred  on  this 
institution,  it  must  be  by  a  statute  or  statutory  Rules 
authorising  it  in  that  behalf.  It  is  also  to  be  ensured 
that  this  watch  or  surveillance  does  not  degenerate  into 


•'■,,■:—  ■:;■:?.  -i:-^,,-- 


■:."„.;;-.,;•.,-).,  :.,..-..        a'Maua*lBaiia^BS8!a™;fis.i%i.-jli'iffi^..i,;  a... 


31 


abuse  and/or  misuse  of  authority,  which  may  well 
militate  against  individual  freedom  and  liberty,  A 
provision  should,  therefore,  be  made  to  see  that  it  is 
resorted  to  only  in  extreme  emergencies,  when  it  is 
thought  that  it  is  appropriate  to  do  so.  In  any  event, 
this  watch  of  the  intelligence  agency  on  individuals 
and  the  materials  collected  thereby  should  be  open  to 
scrutiny  to  a  Board  or  a  Panel  composed  of  officers  or 
of  public  men  before  authorising  the  continuance  of  the 
watch.  It  should  be  possible  to  harmonise  the  demands 
of  the  security  of  the  State  With  the  democratic 
liberties. 

5.74  The  problems  that  die  LB.  is  being  called  upon 
to  handle  are  increasingly  becoming  more  and  more 
complex,  to  be  left  to  the  judgment  and  decision  of  one 
individual  or  even  a  hierarchy  of  individuals  involved 
directly  with  the  job.  It  needs  to  be  realised  that  the  LB. 
as  an  institution  plays  a  very  important  and  vital  role 
in  the  life  and  affairs  of  the  nation.  On  its  being  able 
to  function  efficiently,  effectively  and  yet  impartially 
and  objectively,  depends  not  only  the  security  of  the 
State'  but  also  the  liberty  of  its  citizens.  Considering, 
therefore,  the  stakes  that  are  involved  in  the  proper 
and  purposeful  functioning  of  the  LB.,  it  is  imperative  . 
that  it  gets  the  benefit  of  advice,  guidance  and  wisdom 
of  a  body  of  eminent,  experienced  and  patriotic  group 
of  individuals  drawn  from  different  disciplines  and 
whose  loyalty  and  personal  integrity  cannot  ever  be 
called  into  question.  This  in  turn  will  generate  the 
requisite  faith  and  confidence  of  the  citizens  of  the 
country  in  this  very  important  institution  on  the  fair, 
correct  and  proper  functioning  of  which  alone  would 
eventually  depend  the  safety,  the  security  and  the  liberty 
of  the  people  of  this  country. 

5.75  This  is  only  to  emphasise  that  the  Intelligence 
Bureau  should  not  be  entitled  to  act  as  a  super- watch- 
men over  the  activities  of  politicians  to  whatever  party 
they  belong  and  the  activities  of  the  Intelligence 
Bureau  should  be  subject  to  regulation  and  control  in- 
sofar as  these  activities  concern  some  of  the  clandestine 
parts  which  have  come  to  the  notice  of  the  Commission, 
to  ensure  that  this  does  not  degenerate  into  misuse  or 
abuse  of  authority.  In  a  strict  theoretical  sense  in  a 
democratic  country  any  secret  operation  of  the  nature 
conducted  by  the  Intelligence  Bureau,  which  have  come 
to  the  notice  of  the  Commission,  would  be  contrary  to 

;  the  democratic  norms.  The  Intelligence  Bureau  should 
not  be  its  own  judge  of  its  operations  with  regard  to 
the  necessity  or  the  propriety  thereof,  nor  should  it  be 
allowed  to  act  as  an  agency  or  an  instrument  of  politi- 
cians or  to  degenerate  into  an  institution  of  controlling 
the  opponents  of  the  political  party  in  power  or  ele- 
ments within  the  party  in  power  with  which  the'  control- 
ling authority  of  the  party  does  not  see  eye  to  eye. 

5.76  In  the  present  case  the  watch  on.  a  senior 
Minister  of  the  Cabinet  rank  and  tapping  of  the  tele- 
phone of  Shri  Jagjiwan  Ram  could  not  be  justified.  It 
is  somewhat  of  a  mysterious  circumstance,  that  such 
surveillance  should  have  been  maintained  and  allowed 
to  continue.  There  is  n6  evidence  as  to  who  ordered  it, 
what  steps  were  taken  to  ensure  that  the  reports 
emanating  from  the  Bureau  were  tested„.and  found  to 


be  correct ;  and  what  were  the  safeguards  the  Govern- 
ment took  to  prevent  and  protect  itself  from  acting  on 
incorrect  and  incomplete  information  ? 

5.77  The  Water  Gate  affair  and  its  aftermath  in 
the  United  States  of  America  led  to  some  very  useful 
improvisations  of  built-in  safeguards  for  overseeing  the 
activities  of  that  country's  Intelligence  Agencies. 

5.78  The  Commission  recommends  that  appropriate 
safeguards  are  necessary  and  should  be  devised  by  the 
Government  so  as  to  protect  the  activities  of  the  In- 
telligence Bureau  being  used  as  an  instrument  of 
political  spying  either  by  the  Government  or  by  some- 
one in  the  Government.  This  issue  has  been  raised 
to  concentrate  attention  and  if  considered  appropriate 
to  generate  public  debate  on  the  question. 

5.79  It  is  also  necessary  to  invite  attention  to  the 
misuse  of  Air  Force  aircraft.  It  appears  that  for  the 
benefit  of  individuals  for  travelling  on  State  duty  or 
for  State  work  Indian  Air  Force  aircraft  have  been 
used  surreptitiously  and,  according  to  the  existing 
Rules,  those  persons  were  not  entitled  to  the  us©  of 
the  Aircraft.  The  Commission  recommends  to  the 
Government  the  framing  of  appropriate  Rules  in  this 
behalf  and  also  to  scrutinise  whether  the  use  of  the 
Aircraft  on  June  25,  1975  in  the  circumstances  was 
warranted  and,  if  not,  whether  bills  for  charges  ap- 
propriate in  that  behalf  were  duly  tendered  and,  if  not 
tendered,  to  identify  those  responsible  for  breach  of 
the  Rules. 

5.80  Attention  may  also  be  invited  to  the  gross 
irregularities  to  which  the  provisions  of  the  Mainten- 
ance of  Internal  Security  Act  and  provisions  of  the 
Defence  of  India  Rules  were  misused  to  the  detriment 
of  political  opponents.  This  question  will  be  dealt 
with  at  some  length  hereafter.  But  it  may  be  suffi- 
cient at  this  stage  to  observe  that  the  minimum  require- 
ments of  the  provisions  of  the  Maintenance  of  Internal 
Security  Act  and  the  Defence  of  India  Rules  were  not 
complied  with,  either  at  the  behest  of  Smt.  Indira 
Gandhi  or  her  aides  and  orders  were  made  without 
any  grounds,  without  any  satisfaction  or  maintenance 
of  any  record  regarding*  the  satisfaction  of  competent 
authorities;  and  personal  liberty  of  many  citizens  was 
taken  way  and  they  continued  to  remain  deprived  of 
that  liberty  for  substantial  periods  even  in  face  of  the 
safeguards  which  were  incorporated  against  misuse 
of  section  16A  of  MISA  which  was  disregarded  with 
impunity. 

5.81  In  Delhi  and  in  the  States,  which  had  advance 
information  about  the  promulgation  of  Emergency, 
a  large  number  of  anests/detentionS  followed  under 
MISA  in  which  the  safeguards  guaranteed  against  the 
misuse  of  the  Act  were  ignored  and  grounds  of  de* 
tentions  were  not  furnished  in  a  large  number  of  cases 
and  in  many  cases  grounds  of  detentions  were  prepar- 
ed and  even  pre-dated  and  sent  many  days  after  the 
persons  concerned  had  been  arrested/detained  in  jails. 
In  a  number  of  cases  grounds  of  detentions  had  no 
relevance  to  the  factual  positions  and  in  a  feV  easel 
grounds  were  fabricated  by  the  police  and  the,  Magis- 
trates did  not  hesitate  to  sign  them.  An  era  of  collu- 
sion between  the  police  and  the  Magistracy  ensiled.  In 


32 


many  cases  oral  instructions  were,  issued  from  the 
State  Headquarters  for  arrests  of  persons  under  MISA, 
In  quite  a  few  cases  the  persons  were  initially  taken 
into  custody  under  the  preventive  sections  of  law  and 
thereafter  detained  under  MISA.  This  was  the  de- 
vice, which  appears  to  have  been  resorted  to  in  the 
Union  Territory  of  Delhi  .shortly  after  the  promulga- 
tion, of  Emergency.  A  number  of  persons  were  arrest- 
ed on  false  charges  under  section  108  or  section  151 
of  the  Code  of  Criminal  Procedure  or  under  both 
these  sections.  Such  persons  were  produced  before" 
the  Magistrates  and  the  Magistrates  in  a  number  of 
cases  either  declined  to  grant  bail  or  there  was  delay 
in  effecting  the  orders  of  bail  and  in  the  meanwhile 
orders  of  detentions  were  procured  from  the  Magis- 
trates, which  were  passed  not  infrequently  on  non- 
existent or  fabricated  grounds.  The  manner  in  which 
the  provisions  of  MISA  were  used  was  nothing  short 
of  perversion  and  mockery  of  its  provisions  and  all  the 
safeguards  and  guarantees  that  had  been  promised  in 
the  Parliament  when  the  MISA  Bill  was  enacted,  were 


totally  disregarded.  Many  apprehensions,  which  were 
expressed  by  the  Members  of  Parliament,  who  spoke 
against  conferment  of  such  wide  powers  when  the  Bill 
was  enacted,  came  true. 


5.82  The  safeguards  enshrined  in  the  enactment 
were  rendered  meaningless  by  the  callous  misapplica- 
tion of  this  Act  by  the  police  and  the  Magistracy,  in 
many  cases  with  the  fall  knowledge  and  concurrence 
of  some  of  the  State  Governments.  The  use  and/or 
the  misuse  of  this.  Act  raises  issues,  which  requires 
examination  in  the  larger  context.  At  no  time,  either 
normal  or  abnormal,  should  there  be  any  possibility 
of  misuse  of  the  powers  of  arrests.  It  needs  to  be 
made  clear  to  all  those  responsible  for  overseeing  the 
correct  application  of  the  powers  of  arrest/detention 
by  the  junior  officers,  that  the  senior  functionaries  at 
the  bureaucratic  and  political  levels  would  be  held 
directly  accountable  for  any  misuse  or  abuse  of  the 
powers  of  arrest  and  detention.. 


■r»va^^.>-L<=!^i^ja^":^^ji;v^..-j.'v>a....  ■ 


CHAPTER  VI 


6.1  The  Commission  availed  itself  of  the  opportu- 
nity of  going  through  a  large  number  of  files  of  the 
Information  &  Broadcasting  Ministry  relating  to  the 
enunciation  of  policies  on  various  aspects  connected 

.  with  the  management  of  the  different  media  of  the 
Government  during  the  Emergency.  Quite  a  number 
of  these  items  also  came  up  for  hearing  before  the 
Commission  and  several  witnesses  made  statements 
before  the  Commission  with  regard  to  the  information 
that  was  in  their  possession  or  the  experiences  that  they 
personally  had  undergone  as  a  result  of  the  policy 
then  followed  by  the  Information  and  Broadcasting 
Ministry  of  the  Government.  The  items  that  have 
been  brought  out^and  which  are  being  reproduced 
below  are  based  on  documents  of  the  Government  and 
statements  of  the  witnesses,  both  official  and  non- 
official. 

6.2  The  Commission  feels  that  it  is  necessary  to 
place  oh  record  the  actual  working  of  tije  I,  &  B. 
Ministry  during  the  Emergency,  as  a  part  of  the 
record  of  the  times,  in  so  far  as  it  is  reflected  in  the 
following  pages. 

6.3  Having  regard  to  the  voluminous  nature  of 
the  evidence,  the  Commission  has  not  thought  it  ap- 
propriate to  issue  any  summons  under  section  8B  of 
the  Commissions  of  Inquiry  Act  or  notice  under  rule 
5(2)(a)  of  the  Commissions  of  Inquiry  Rules  to  any  of 
the  persons  figuring  in  the  note.  -The  Commission, 
therefore,  refrains  from  drawing  any  adverse  inference 
or  making  any  comments  which  would  affect  the 
reputation  of  any  of  the  individuals  concerned.  This 
is,  however*  without  prejudice  to  the  notices  under 
rule  5 (2) (a)  and  summons  under  section  8B  of  the 
Act  issued  to  Shri  V.  C.  Shukla  with  regard  to  the 
following  three  cases,  which  are  being  dealt  with 
separately  : 

(i)  Translation  of  the  Congress  manifesto; 

(ii)  Printing  of  posters;  and 

(iii)  Treatment  meted  out  to  Shri  Kishoi'e  Kumar. 

6.4  The  media  policy  of  the  Government  was  enun- 
ciated by  the  then  Prime  Minister,  Smt.  Indira  Gandhi 
at  a  high  level  meeting  which  was  held  under  her 
Chairmanship  on  July  26,  1975,  which  was  attended 
amongst  others  by  the  Law  Minister,  Shri  H.  R.  Go- 
khale,  the  I.  &  B.  Minister  Shri  V.  C.  Shukla  and  the 
Chairman  Policy  Planning  Committee  of  the  Ministry 
of  External  Affairs,  Shri  G.  Parthsarathy.  At  this 
meeting  it  had  been  decided  that  a  law  should  be  made 
to  prevent  scurrilous,  malicious  and  mischievous  writ- 
ings in  newspapers  and  journals,  that  news  agencies 
should  be  re-structured,  that  the  Government  policy 
regarding  issue  of  advertisements  by  DAVP  should  be 


reviewed,  that  the  Press  Council  should  be  allowed  to 
die  a  natural  death,  and  a  review  should  be  made  of 
all  facilities  which  had  been  given  to  Press  correspon- 
dents by  the  Government. 

6.5  While  explaining  the  reasons  for  the  imposition 
of  Emergency,  Smt.  Gandhi  had  said  that  it  was  the 
newspapers  which  were  inciting  the  people  and  creating 
a  terrible  situation.  According  to  her,  the  agitation 
was  only  in  the  newspapers  and  once  the  newspapers 
were  placed  under  censorship  there  was  no  agitation. 
Similarly,  in  a  letter  which  she  wrote  to  Shri  Saroj 
Mukherjee,  Member  of  Parliament,  she  said  that  the 
Press  had  been  fomenting  trouble  baselessly  and  had 
exaggerated  rumours. 

6.6  Shri  B.  G.  Verghese,  former  Editor  of  the  'Hin- 
dustan Times',  New  Delhi,  who  was  examined  by 
the  Commission,  said  tr>at  Shri  V.  C.  Shukla  in  his 
first  meeting  with  Delhi  Editors  had  told  them  that 
no  confrontation  would  be  permitted  between  the 
Press  and  the  Government  and  he  explained  that  this 
meant,  the  end  of  dissent  and  protest.  Shri  Shukla, 
has,  however,  explained  that  what  he  meant  by  the 
word  'confrontation'  was  that  '  there  should  b& 
no  fight  or  quarrel  between  a  free  Press  and  a 
Government  elected  by  democratic  processes. 

6.7  The  reasons  for  the  measures  taken  against  the 
media  in  general  and  the  Press  in  particular  was, 
according  to  Shri  B.  G.  Verghese,  tp  keep  the  public 
in  ignorance  and:  instil  fear  in  then!  thereby  suppfess- 
igg^dissent  in  every_form,  mdiyidual,  political,  parlia- 
jrrrentaj^aad4udidal_aj^thatjt  was  used  as  an.instxu- 
rD£jtf-ofr-n«w4-manag£mejit_  ajined  at  thought  .control. 
Shri  Raj  Mohan  Gandhi,  Editor  of  ^Hiramat'  Bombay 
has  confirmed  that  censorship  was  used  to  eliminate 
dissent  and  it  vastly  exceeded  the  requirements  of  the 
Defence  and  Internal  Security  of  India  Rules.  He  said 
that  Government  achieved  this  total  power  to  prevent 
publication  of  dissent  in  a  round-about  manner,  because 
it  did  not  want  the  stigma  of  officially  imposed  pre- 
ceiisorsbip.  The  Government,  according  to  Shri  Raj 
Mohan  Gandhi  wanted  the  powers  of  a  dictatorship.' 
with  the  prestige  of  a  democracy  Shri  Romesh  Thapar, 
Editor  of  'Seminar'  New  Delhi  has  testified  to  the  at- 
mosphere of  fear  that  surrounded  everyone  in  the 
profession.  Even  Editors  of  national  dailies  would 
not  speak  openly  against  the  steps  that  the  Govern- 
ment had  taken  against  the  media. 

6.8  This  pervasive  atmosphere  of  fear  in  the  media 
forced  many  periodicals,  to  close  down  publication  as 
they  could  not  find  any  printer  to  print  their  copies. 
Thus,  Shri  A.  D.  Gorwala,  Editor  of  'Opinion',  could 
nOt  find  a  printer  and  ultimately  he  resorted  to  cyclcn 
styling  his  magazine  and  mailing  the  issues  to  indivi- 
dual  subscribers.    Shri   S.   M.   Joshi   of   'Sadhana', 


33 


34 


Poona,  also  had  to  change  his  press  as  the  ■■'keeper  of 
the  press  'Janwani'  was  issued  with  a  notice  as  to 
why  his  press  should  not  be  forfeited  for  printing 
'Sadhana'.  Shri  Romesh  Thapar  has  also  testified  as 
to  how  the  'Statesman'  press  refused  to  print  his 
magazine  unless  he  allowed  the  'Statesman's'  lawyers 
to  first  check  the  articles. 

6.9  The  functioning  of  the  media  during  ^he  Emer- 
gency period  can  be  discussed  under  three  main 
heads  : — 

A'.  Censorship. 

B.  Other  pressures  on  the  Press. 

C.  Functioning  of  Government  Media  Units  par- 

ticularly, A.I.R.  and  Doordarshan. 

A,  CENSORSHIP 

(1)  Imposition  oj  Censorship   and    disconnection    of 
electricity  supply 

6.10  Consequent  upon  the  declaration  of  Emergency 
op  June  25,  1975,  control  of  the  media  had  become 
necessary.  At  the  Cabinet  meeting  held  at  8.30  p.m., 
on  June  26,  1975  the  Cabinet,  while  reviewing  the 
Emergency  situation  agreed  with  the  recommendations 
Of  the  Ministry  of  Home  Affairs  to  impose  Press  Cen- 
sorship. During  the  2  or  3  days  when  the  censorship 
apparatus  was  being  Set  up,  power  supply  to  the  news- 
paper offices  in  Delhi  remained  disrupted.  The  Go- 
vernment disconnected  electricity  \d.,  the  newspaper 
offices  on  the  night  of  the  June  25,  1975.  when  Emer- 
gency was  imposed.  •  Shri  B.  N.  Mehrotra,  "who  was 
the  then  General  Manager  of  Delhi  Electric  Supply 
Undertaking  was  given  oral  orders  on  the  night '  of 
June  25,  1975  by  the  Lt.  Governor  of  Delhi,  Slid 
Krishan  Chand  that  electric  supply  to  the  newspaper 
offices  in  the  city  should  be  disconnected.  Though 
under  the  provisions  of  the  Electricity  Supply  Act  or 
the  Electricity  Act  this  was  not  within  the  competence 
of  the  General  Manager,  Delhi  Electric  Supply  Under- 
taking, the  disconnection  was  carried  out  on  the  basis 
of  certain  security  reasons  that  were  adduced  without 
any  formal  orders  on  that  behalf.  As  some  of  the 
newspapers  lay  outside  Bahadurshah  Zafar  Marg  area 
(the  Motherland  in  Jhandewalan,  Hindustan  Times  and 
the  Statesman  in  Connaught  Place)  the  electricity  to 
these  papers  could  not  be  disconnected  simultaneously. 
However,  electricity  to  all  newspaper  offices  on  Baha- 
durshah Zafar  Marg  was  disconnected  whereas  in 
other  areas  disconnection  took  place  only  on  June  26, 
1976.  Two  or  three  days  later  after  the  censorship 
apparatus  had  been  set  up,  electricity  supply  was  res- 
tored to  all  the  newspaper  offices.  According  to  Shri 
Krishan  Chand,  the  then  Lt.  Governor  of  Delhi,  the 
instructions  for  disconnecting  power  supply  came 
during  one  of  a  series  of  meetings  at  the  Prime  Minis- 
ter's House  on  June  25,  1975,  but  he  was  unable  to 
recollect  as  to  who  gave  the  specific  orders. 

(2)  Rule  48 

6.11  Censorship  was  imposed  under  Rule  48  of 
Defence  and  Internal  Security  of  India  Rules.  This 
Rule  gave  authority  to  the  Government  to  censor    or 


pre-censor  matters  only  in  respect  of  the    following 
subjects  : — 

(i)  Defence  of  India; 

(ii)  Civil  Defence; 
(iii)  Public  Safety; 

(iv)  Maintenance  of  Public  Order.;  and 
(v)  Efficient  conduct  of  Military  Operations. 

6.12  On  June  26,  1975  the  Government  issued 
Statutory  Order  275(E)  under  Rule  48,  which  listed 
the  subjects  which  came  within  the  scope  of  pre- 
censorship.  This  order  was  subsequently  expanded 
to  include  additional  subjects. 

(3)   Censorship  Guidelines 

6.13  In  practice,  however,  censorship  was  carried 
on  through  a  set  of  guidelines  issued  by  the  Chief 
Censor  from  time  to  time,  both  to  subordinate  offices 
and  to  the  Press.  It  is  to  be  noted  that  it  was  speci- 
fically mentioned  that  these  guidelines  were  themselves 
not  to  be  published. 

6.14  The  first  set!  of  guidelines  were  issued  on 
July  3,  1975  and  supplementary  guidelines  on 
July  4,  19751  According  to  Shri  H.  J.  D'Penha,  the 
then  Chief  Censor  to  the  Government,  these  guidelines 
were  hurriedly  drawn  up  and  were  vague  and,  there- 
fore, a  fresh  set  of  guidelines  were  prepared  and  issued 
on  July  13,  1975.  These  guidelines  were  prepared  by 
Shri  K.  N.  Prasad,  Additional  Secretary,  Information 
and  Broadcasting  Ministry  and  were  finalised  at  a 
meeting,  with  the  then  Secretary,  I  &  B  Ministry,  Shri.' 
A.  J.  Kidwai  and  Shri  H.  J.  D'Penha.  These  guide- 
lines were  approved  by  the  Minister,  Shri  Vidya 
Charan  Shukla.  These  guidelines  exceeded  the  scope  ; 
of  the  Rule  48  of  the  Defence  and  Internal  Security 
of  India  Rules  insofar  as  they  prevented  Editors 
leaving  editorial  columns  blank  or  filling  them  with 
quotations  from  great  works  of  literature  or  from 
national  leaders  like  Mahatma  Gandhi  or  Rabindra 
Nath  Tagore  or  conveying  disapproval  of  the  Gov- 
ernment's measures  undermining  public  confidence  in 
national  credit  or  any  Government  loan.  The  Infor- 
mation and  Broadcasting  Ministry  did  not  attempt  to 
find  out  whether  these  guidelines  Were  within  the 
scope  of  the  Defence  and  Internal  Security  of  India 
Rules  or  not.  According  to  Shri  H.  J.  D'Penha,  a  sug- 
gestion had  been  made  by  him  that  the  approval  of 
the  Law  Ministry  should  be  obtained  for  these  guide- 
lines so  that  they  would  be  in  conformity  with  Statu-; 
tory  order  275(E).  The  Minister  had,  however,  ins- 
tructed that  in  case  these  guidelines  were  challenged  in 
court,  appropriate  action  could  then  be  taken.  Shri 
Shukla  during  his  testimony  before  the  Commission 
said  that  these  were  not  intended  to  have  any  statutory 
force  and  that  these  guidelines  were  devised  merely 
(o  assist  the  editors,  and  therefore,  no  action  was 
taken  to  find  out  whether  they  were  in  consonance  with 
the  law  on  the  subject.  Merely  disobeying  the  guide- 
lines would  not  have  warranted  any  action  against  the 
newspaper  concerned. 


■^S?^:-\.^fc-.^:- 


''BS-ytsa :  i >  .<^w. 


atea^irtrtssuffisjf 


-7  .    .      ,'Hi        ^      .'_    '-l~     -  i.  ...iStaii 


35 


.6.15  However,  this  contention  of  Shri  Shukla  that 
the  guidelines  did  not  have  any  force  of  law,  and  that 
disobeying  them  would  not  warrant  action,  does  not 
appear  to  be  correct.  Counsel  for  the  Union  Gov- 
ernment and  for  the  Chief  Censor  had  in  the  'Bhoomi- 
putra'  case  before  the  Gujarat  High  Court  himself 
relied  upon  these  guidelines  In  support  of  the  impug- 
ned order  of  censorship  on  'Bhodmiputra'.  The 
Gujarat  High  Court,  however,  held  that  these  guidelines 
were  illegal  and  inoperative.  The  Gujarat  High 
Court  also  said  that  after  Rule  48  had  been  made,  the 
Central  Government  and  the  Chief  Censor  had  gone 
stride  after  stride  beyond  the  scope  of  Rule  48. 

6.16  Similarly,  in  the  Binod  Rao's  case,  the  Bom- 
bay High  Court  held  that  under  the  censorship  orders, 
the  Chief  Censor  could  not  possibly  issue  instructions 
in  the  guise  of  directions  which  go  beyond  the  scope 
of  censorship. 

(4)   Censorship  of -Parliament  and  Court  Proceedings 

6.17  Parliamentary  and  Court  proceedings  were 
also  subject  to  censorship.  The  guidelines  issued  on 
July  13  1975  had  stated  that  censorship  would  apply 
to  the  publication  of  some  news  etc.  relating  to  the 
proceedings  of  Parliament  and  of  Legislative  Assemb- 
lies. The  guidelines  inter  alia  stated  that  statements 
made  On  behalf  of  the  Government  could  be  publish- 
ed either  in  full  or  in  a  condensed  form  but  its  contents 
should  not  infringe  censorship.  Nothing  else  was 
allowed  to  be  published  except  the  names  and  party 
affiliation  Of  the  Members  speaking  on  a  subject  in 
support  or  against  the  subject.  The  result  of  voting 
could  be  factually  reported. 

6.18  Supplementary  guidelines  for  Parliament  cove- 
rage for  the  Censor  were  issued  on  22-7-1975.  These 
guidelines  inier  alia  laid  down  that  (a)  movement  of 
Members  within  the  House  should  not  be  reported,  e.g., 
ruling  party  Members  moving  to  the  opposition  bench- 
es or  vice-versa,  (b)  remarks  from  the  Chair  in  either 
House  should  not  be  allowed  as  a  part  of  the  proceed- 
ings of  the  House,  (c)  reference  to  some  of  the  empty 
seats  in  the  Opposition  Benches  should  not  be  allow- 
ed, (d)  names  of  Members  who  were  absent  was  also 
not  allowed. 

6.19  Following  a  meeting  held  at  the  residence  of 
Shri  K.  Raghuramiah,  Minister  for  Parliamentary 
Affairs  on  December  .13,  1975,  which  was  attended 
amongst  others. by  Shri  V.  C.  Shukla,  Minister  for 
Information  &  Broadcasting,  Shri  Om  Mehta,  Minister 
in  the  Ministry  of  Home  Affairs,  Shri  S.  N.  Banerjee, 
Secretary  General,  Rajya'  Sabha  and  Shri  M.  L.  Shak- 
dhar,  Secretary  General,  Lok  Sabha,  it  was  decided 
to  impose  mandatory  pre-censoiship  on  all  newspapers 
and  agencies  in  regard  to  news,  comments,  rumours 
or  other  reports  relating  to  the  Lok  Sabha  and  Rajya 
Sabha  Sessions  which  were  to  be  held  in  January 
1976.  The  guidelines  issued  on  January  4.  1976  to 
the  Censors  for  covering  the  proceedings  of  the  Parlia- 
ment clearly  laid  down  that  news,  reports,  comments 
relating  to  the  proceedings  of  the  Parliament,  would 
be  governed  bv  Rule  48  of  the  Defence  and  Internal 
Security  of  India  Rules  arid,  therefore,  the  publication 
of  news  regarding  Parliament  had  to  be  cleared  by  the 


Censor  Officer  before  it  could  be  published.  A  long 
series  of  'dos5  and  'douts'  had  been  given  in  these 
guidelines,  but  they  were  all  subject  to  the  final  proviso 
that  any  report  or  news  which  was  violative  of  cen- 
sorship rules  in  force  at  that  time  would  not  be  per- 
mitted. 


6.20  From  the  January  Session  of  Parliament,  a 
Censor  Room  started  functioning  from  Room  No.  64, 
1st  Floor,  Parliament  House.  Censors  worked  there 
in  two  shifts  from  10.30  a.m.  to  3  p.m.  and  3  p.m. 
to  10.00  p.m.  It  was  also  decided  that  there  would 
be  no  name  board  affixed  On  the  door  to  show  that  it 
was  the  Censor  Room. 


6.21  On  January  14,  1976  all  news  etc.,  relating 
to  questions  and  answers,  statements  and  discussions 
on  censorship  in  Parliament  were  expressly  disallowed 
from  publication.  On  7th  March,  1976  fresh  guide- 
lines were  issued  for  Parliament.  These  guidelines 
said  that  the  image  of  Parliament  as  the  voice  of  the 
people  and  as  a  sovereign  body  should  not  be  allowed 
to  be  impaired  but  all  news  etc.,  relating  to  the  pro- 
ceedings of  the  Parliament  were  to  be  governed  by 
Rule  48  of  Defence  and  Internal  Security  of  India 
Rules. 

6.22  As  regards  courts  of  law,  guidelines  were 
issued  to  the  press  which  said  that  while  publishing 
news,  comments  or  reports  relating  to  proceedings  in 
a  Court  of  Law  only  the  operative  part  of  the  judg- 
ment was  to  be  published  in  appropriate  language 
and  nothing  should  be  published  which  would  infringe 
censorship  laws.  During  the  course  Of  his  testimony, 
Shri  HJ.D'Penha,  Chief  Censor  said  that  publication 
of  Court  judgments  were  censored  under  the  instruc- 
tion-of  the  Ministry  of  Home  Affairs  after  consultation 
with  the  Law  Ministry.  When  it  was  pointed  out  to 
him  that  in  the  'Bhoomiputia'  case,  where  the  High 
Court  had  ordered  that  judgment  should  not  be  censor-  - 
ed  and  yet  he  had  issued  instructions  to  all  newspapers 
that  the  judgment  should  not  be  published,  he  said 
that  it  was  not  a  censorship  order  but  merely  'public 
relations'  advice. 

6.23  Not  merely  the  publications  of  court  judg- 
ments were  censored  but  directions  were  also  given 
as  to  how  particular  judgments  should  be  published. 
In  Smt.  Indira  Gandhi's  appeal  to  the  Supreme  Court, 
in  her  election  petition  case,  a  series  of  directions  were 
issued  by  the  Chief  Censor  on  what  aspects  of  the 
case  should  be  given  publicity  and  what  aspects  of  the 
case  should  not  be  played  up  at  all.  When  the  judg- 
ment was  delivered  in  this  case,  instructions  went  to  all 
newspapers  to  play  up  the  fact  that  Smt.  Indira 
Gandhi's  appeal  had  been  upheld  and  that  the  cross 
appeal  of  Shri  Raj  Narain  dismissed. 

6.24  According  to  Shri  H.  J.  D'Penha  this  was 
done  on  the  instructions  of  the  Ministry  of  Informa- 
tion &  Broadcasting.  Shri  D'Penha  admitted  to  issu- 
ing a  number  of  instructions  regarding  how  judg- 
ments of  Supreme  Court  and  other  Courts  should  be 
carried  by  newspapers  and  said  that  these  had  been 
done  under  the  instructions  of  superior  authorities. 


36 


6.25  Shri  V.  C.  Shukla,  Minister  for  Information 
&  Broadcasting  said  that  any  instructions  that  he  bad 
issued  regarding  publication  of  High  Court  judgments 
were  subject  to  law.  According  to  Shri  Shukla  no 
officer  of  the  Ministry  was  expected  to  flout  the  law 
in  any  matter  or  go  against  the  directions  of  the 
Courts. 

(5)  Transfer  of  Powers  to  administer  Rule  48, 
DISIR  from  Ministry  of  Home  Affairs  to  Minis- 
try of  Information  and  Broadcasting 

6.26  When  censorship  was  originally  imposed,  the 
powers  under  Rule  48  of  Defence  and  Internal  Secu- 
rity of  India  Rules  were  with  the  Ministry  of  Home 
Affairs  though  the  actual  functioning  of  the  censorship 
machinery  was  under  the  Ministry  of  Information  and 
Broadcasting.  The  Ministry  of  Home  Affairs  fre- 
quently expressed  its  unhappiness  at  the  short  notice 
which  was  generally  given  and  the  scanty  material 
which  was  supplied  by  the  Information  &  Broadcast- 
ing Ministry  when  it  requested  the  Ministry  of  Home 
Affairs  to  issue  pre-censorship  orders. 

6.27  Thus  when  the  'seminar'  Magazine  was  placed 
under  pre-censorship,  the  Information  &  Broadcast- 
ing Ministry  sent  a  note  which  did  not  even  contain 
relevant  extracts  o'£  the  publication  which  were  con- 
sidered prejudicial.  Sufficient  time  or  opportunity 
was  hot  given  to  the  Ministry  of  Home  Affairs  to 
consider  the  case.  On  the  other  hand  the  Informa- 
tion &  Broadcasting  Ministry  expected  that  orders 
would  be  issued  immediately.  At  a  meeting  held  by 
the  Information  &  Broadcasting  Minister,  Shri  V,  C, 
Shukla,  on  July  15,  1976  with  Shri  R.  L.  Mishra, 
Joint  Secretary  (IS),  Ministry  of  Home  Affairs,  Shri 
Shukla  expressed  the  view  that  there  was  a  conven- 
tion that  once  a  case  had  been  cleared  at  his  level  and 
he  had  taken  a  decision,  no  further  examination 
should  take  place  in  the  Ministry  of  Home  Affairs. 
At  that  time  a  decision  was  taken  at  the  Home  Minis- 
ter's level  that  while  the  Ministry  of  Home  Affairs 
would  process  cases  expeditiously,  the  I  &  B  Minis- 
try would  supply  full  material  on  which,  the  Ministry 
pf  Home  Affairs  could  then  exercise  its  own  judg- 
ment. 

6.28  Subsequently  the  Information  &  Broadcasting 
Ministry  again  on  August  21,  1976  asked  for  pre- 
censorship  orders  under  Rule  48(1)  to  be  issued  to 
Indian  Express.  Again  no  reasons  were  adduced. 
As  the  Information  &  Broadcasting  Ministry  was  in- 
sistent, the  Home  Minister's  orders  were  obtained  on 
telephone  and  pre-censorship  orders  issued.  Seeirg 
the  reluctance  of  the  I  &  B  Ministry  to  furnish  de- 
tails and  requisite  material  to  the  Ministry  of  Home 
Affairs  it  was  decided  by  the  Home  Minister  that  all 
powers  under  Rule  48  should  be  transferred  to  the 
Ministry  of  Information  and  Broadcasting. 

(6)  Day-to-day  operation  of  censorship 

6.29  The  actual  work  of  censorship  on  day-to-day 
basis  went  even  beyond  the  scope  of  the  guidelines. 
Orders  were  arbitrary  in  nature,  capricious  and  were 


usually  issued  orally  without  any  relation  to  the  pro- 
visions of  Rule  48.  Issuing  of  oral  orders  had  been 
expressely  forbidden  by  the  Chief  Censor  in  the  guide- 
lines which  he  had  issued  on  July  13,  1975.  Shri 
H.  J.  D'Penha  has  said  that  in  view  of  the  time 
schedule  involved  and  the  round-the-clock  working 
of  daily  newspapers  and  agencies,  reducing  orders  in- 
to writing  would  have  defeated  the  very  purpose  of 
censorship  and  hence  from  almost  the  very  beginning 
directions  on  subjects  to  be  censored  were  issued 
orally.  Shri  D'Penha  has  also  said  that  he  himself 
used  to  receive  such  orders  from  various  authorities 
in  the  Information  &  Broadcasting  Ministry  and  in 
other  Ministries  and  these  orders  were  very  seldom 
reduced  into  writing.  Most  of  these  instructions 
have  been  recorded  in  a  Log  Book  (4  volumes)  main- 
tained by  the  Duty  Roorn  of  the  Censor  Department. 
A  few  representative  illustrations  from  the  Censors 
Log  Books  are  reproduced  below  : — 

(1)  'No  story  is  to  be  cleared  pertaining  to 
Parliament  business  or  Supreme  Court 
appeal  filed  by  Prime  Minister.  No  refe- 
rence to  the  case'   (12th  July,   1975) 

(2)  'As  per  instructions only  the     date 

fixed  for  hearing  of  PM's  appeal  is  to  be 
given.  Lawyers'  name  may  be  given. .  . . 
no  names  of  judges  are  to  be  given'  (14th 
July.  1975) 

(3)  'Reports  on  proceedings  in  the  Verghese 
V/s  Birla  case  should  be  reduced  to  the  ; 
minimum  and  should  be  very  brief.  The 
arguments  need  not  be  mentioned.  If  they 
are  allowed,  should  not  be  more  than  a 
para  or  two'  (22nd  July,  1975) 

(4)  'There  has  been  a  'bu'ndh'  in  Ahmedabad, 
organised  by  the  ruling  party  (Janta  Front). 
If  the  agencies  and  the  correspondents' 
copies  say  that  the  'bundh  was  a  flop'  it 
may  be  allowed,  provided  the  description 
of  the  'bundh'  does  not  go  against  Censor 
instructions'. 

(5)  'Any  statement  made  by  the  Chief  Minister, 
Gujarat,  criticising  any  action  taken  by  the 
Centre  should  be  spiked,  but  if  his  state- 
ment is  innocuous  it  may  be  allowed.  In 
case  of  any  doubt,  please  ring  up  Addition- 
al Chief  Censor,  Shri  U.  C.  Tiwari'  (26th 
July,  1975) 

(6)  'No  reports,  comments  (including  editorial) 
articles,  statement  or  news  on  bonus  to 
employees  shall  be  allowed  Until  further 
instructions  from  Us'  (4th  September,  1975) 

(7)  (i)  No  adverse    criticism  of  the  Ordinance 

on  Bonus  by  Trade  Unions  in    Public 
Sector  Organisations  is  to  be  allowed; 

(ii)  Editorial  comments  on  bonus  are  per- 
missible; 


-*_*_-*.-..       _„l    ^t^rjvt      ...  j'aj..:^.^.... 


37 


(iii)  These  comments  should  be  within  the 
official  explanation  on  the  bonus  issue 
and  should  not  support  an  agitational 
approach;  and 

(iv)   That  these  comments  are  subject  to  pre-. 

censorship. 

(a)  Teleprinter  message  to  all  the  State 
Censors  has  been  sent  on  the  above 
lines,  with  the  following  addi- 
tions ; — 

'words  like  'shock',  'deplore*  or 
'ill-advice'  should  be  altered  to 
'disappointed'  or  'surprise'.  (26th 
September,  1975). 

(8)  'Please  ensure  that  Allahabad  High  Court 
judgment  today  upholding  MISA  detenues* 
right  to  move  High  Court  under. Article  226 
is  not  published  in  the  State.  Instruct  your 
Censor  in- Allahabad  to  kill  story'  (30th 
Qctober,  1975) 

(9)  'As  required,  the  official  version  of  J.  P.'s 
release  with  instructions  not  to  give  pro- 
minence to  the  news  and  not  to  use  photo- 

■    ■!:..  -      graphs  was  communicated  to  agencies  and 

local     papers *    (13th  November, 

1975) 

(10)  'KMLP  (Gujarat)  has  been  dissolved. 
There  is  likelihood  of  some  members  issu- 
ing statements  withdrawing  support  to  the 
Janta  Front  Government  in  Gujarat.     Such 

v:         statements  should  be  allowed.    Statements 
pledging  support  to  the     Janata  Front  Gov- 
ernment by  some  of  the  members  should 
be  spiked'  (Instruction  CC)  11th  February, 
.  \,    1976) 

(11)  'All  the  statements  made  by  the  Janta  Front 
Leaders  alleging  that  Centre  or  Congress 
was  out  to  topple  their  Ministry  or  that 
Janta  Front  would  take  to  agitation  etc., 
should  not  be  allowed.  The  statement  of 
KMLP  leaders  dissolving  their  party,;  in 
support  of  the  Janta  Front  are  also  not  to 
be  allowed.  Anything  which  is  unhelpful 
to  the  present  plan  of  the  Centre  should 
be  killed'  (15th  February,  1976) 

(12)  'As  desired  by  JCC(P)  all  the  local  dailies 
and  news  agencies  were  informed  that 
Shri  Tulmohan  Ram's  case  should  be  sent 
to  us  for  pre-censorship.  All  references  to 
Shri  L.  N.  Mishra,  Shri  Chattopadhyaya 
and  Shri  N.  K.  Singh  are  to  be  deleted' 
(5th  March,  1976) 

(13)  'About  mid-day  today  the  office  of  "Veck- 
shanam'  daily  (Cochin)  wag  searched  by 
the  police  for  reasons  not  known.  This 
daily  newspaper  is  run  by  the  Kerala 
Pradesh  Congress  Committee.  Some  of  the 
newspapers  which  referred  a  story  on  this 
to  me  were  advised  not  to  carry  anything 
for  the  time  being ' 

S/3<)  HA/77— 6 


N.B.< — This  development  assumes  more  import- 
ance in  view  of  the  widening  rift  within  the 
Congress  Party  in  the  State.  The  section 
which  is  rallying  behind  the  PCC  President, 
who  publishes  the  daily  is  very  sore  about 
the. police  search.  The  Police  portfolio  is 
held  by  the  Congress  Minister,  Shri  Karu- 
nakaran  who  is  identified  with  the  rival 
section  in  the  party. 

(This  incident  is  likely  to  precipitate    fur- 
ther) (22nd  April,  1976). 

(14)  'State  Censors  have  been  advised  not  to 
permit  any  comments  or  references  about 
the  transfer  of  High  Court  judges'  (1st 
June,  1976) 

6.30  In  practice  censorship  was  utilised  for  sup- 
pressing news  unfavourable  to  the  Government,  to 
play  up  news  favourable  to  the  Government  and  to 
suppress  news  unfavourable  to  the  supporters  of  the 
Congress  Party.  During  his  statement  before  the 
Commission  Shri  D'Penha  admitted^  that  this  was  done 
under  the  instructions  of  the  Ministers/Ministry.  He 
also  said  that  various  items  of  news  referring  to  fac- 
tionalism in  the  Congress  Party  were  also  censored 
on  instructions- — but  he  has  not  said  whose  instruc- 
tions these  were.  Shri  Shukla  has  said  that  he  had 
not  given  any  instructions  regarding  factionalism  in 
Congress  Party  or  to  censor  adverse  or  critical 
comments  on  the  Youth  Congress. 

6.31  However,  in  one  instance  at  least,  that  of  .the 
magazine  'Mainstream'  pre-censorship  orders  were 
issued  largely  because  of  its  critical  attitude  towards 
Shri  -Sanjay  Gandhi,  Shri  Nikhil  Chakravarty,  Edi- 
tor 'Mainstream'  told  the  Commission  that  Shri  Shukla 
had  called  him  and  told  him  that  Shri  Sanjay  Gandhi 
was  a  national  leader  and  hence  articles  criticising 
him  would  not  be  permitted,  Shri  Chakravarty  was 
asked  to  give  an  assurance  (hat  he  would  refrain  from 
criticising  Shri  Sanjay  Gandhi,  an  assurance  which 
he  refused  to  give.  Subsequently  the  'Mainstream', 
was  placed  under  pre-censorship  because  it  had  criti- 
cised Shri  Sanjay  Gandhi  and  also  because  it  had  cri- 
tically commented  on  the  toppling,  of  Chief  Ministers 
who  did  not  enjoy  the  favour  of  a  particular  coterie 
at  the  Centre.  Shri  Shukla  has,  however,  stated  that 
he  had  merely  advised  Shri  Chakravarty  with  the  best 
of  intentions  and  any  action  against  Shri  Chakravarty 
and  'Mainstream*  that  followed  had  nothing  to  do 
with  the  acceptance  or  otherwise  of  his  advice^. 

6.32  The  capriciousness  of  the  Censor  authorities 
and  their  "arbitrariness  has  been  commented  upon  fey 
a  number  of  Editors.  Shri  Cho  Ramaswamy,'  ESi- 
tor^Tughiak',  gave  a  number  of  examples"  of  how 
jokes,.. cartoons,  and  satirical  articles  in  his. magazine 
wer§  ^iil_ jsiibjected  to  censorship  without  their  being 
even  remotely  concerned  with  the  Defence  and  Inter- 

.  nal  Security  of  India  Rules  and  Statutory  Orders 
made  thereunder.  Thus  even  birthday  greetings  to 
ShriUMorarji  Desai  on  the  latter's  birthday  which  was 
sought  to  be  published  in  the  ' Tughlak'  was  completer 
ly'censored.     Even  quotations  from  statements  made 


38 


by  Smt.  Indira  Gandhi  were  taken^objectton  to  by  the 
Censor.  Shri  Ramaswamy  disclosed  how  he  was 
asked  to  submit  articles  and  sometimes  whole  issues 
of  his  magazines  for  pre-censorship  because  the  issue 
of  'Tughlak'  dated  July  15,  1976  carried  (i)  editorial 
excerpts  from  Nehru  <ii)  letter's  from  readers' 
(iii)  quolations  from  speeches  of  Indira  Gandhi 
(iv)  quotations  from  Hitler  (v)  quotations  from 
Mussolini  (yi)  passages  from  state  play  'Tughlak' 
all  of  which  were  held  objectionable  by  the  Censor. 

6.33  Shri  Nikhil  Chakravarty  has  related  how  Shri 
Shukia  objected  to  quotations  from  Tagore, 
Mahatma  Gandhi  etc.,  and  said  that  they  could  not 
be  used.  Shri  A.  D.  Gorwala,  Editor  of  the 
'Opinion'  had  included  quotations  from  the  Gita  in 
his  magazine  and  the  whole  quotation  was  censored. 
Even  speeches  made  in  Parliament— Lok  Sabha, 
which  had  been  published  with  the  permission  of  the 
Speaker  of  the  House  and  were  available  for  sale  at 
Rs.  2  were  not  permitted  to  be  published  by  the 
Censor  in  Shri  Gorwala's  'Opinion'  magazine.  Shri 
Gorwala  further  stated  that  when  censorship  came. 
it  struck  him  that  the  only  purpose  a  paper  like  his 
could  serve  would  be  to  try  and  encourage  the  spirit 
of  freedom  and  that  is  why  he  continued  publishing 
and  in  his  first  issue  brought  out  a  series  of  quota- 
tions on  liberty.  This  was  struck  down  by  the 
Censor;  after  that  if  there  was  even  a  word  'liberty' 
6r  'freedom'  or  any  reflection  about  democracy  it 
would  be  struck  out. 

'6.34  Shri  S.  M.  Josh\  Editor  of  'Sadhana'  while 
corroborating  Shri  Gorwala,  Shri  Chakravarty  and 
Shri  Ramaswamy  about  how  the  Censor  took  objec- 
tion to  his  publication  of  quotations  from  Mahatma 
Gandhi  and  other  eminent  persons,  said  that  the  ob- 
jective of  the  Government  was  to  see  that  everybody 
was  silenced  and  in  respect  of  censorship  the  ques- 
tion of  law  did  not  exist. 

6.34A  Shri  Shukia  said  that  the  reasons  why  quota- 
tions were  disallowed  were  that  that  these  quotations 
which  were  made  with  reference  to  the  British  Raj 
were  now  taken  out  of  context,  would  create  mis- 
understandings and  therefore  they  should  be  avoided. 

6.3'5  Newspapers  were  not  even  allowed  to  keep 
the  editorial  columns  blank.  According  to  Shri 
Shukia  if  the  editorial  space  was  left  blank  this  signi- 
fied protest  and  according  to  the  policy  of  the  Gov- 
ernment it  was  not  proposed  to  allow  any  protest  to 
be  signified  in  that  manner.  He  further  clarified  that 
space  kept  blank  in  a  newspaper  was  a  protest  agaiiift 
the  emergency.  Therefore,  it  was  unlawful  and 
therefore,  the  Government  was  entitled  to  say  that  it 
should  not  be  left  blank.  Both  Shri  Raj  Mohan 
Gandhi  and  Shri  Nikhil  Chakravarty  felt  that  Gov- 
ernment's objection  to  editors  leaving  space  blank  in 
the  newspapers  was  because  they  wanted  to  give  an 
impression  that  there  was  no  censorship  in  the 
country. 

6.36  According  to  Shri  Chakravarty  this  was  an 
attempt  at  self-deception  on  the  part  of  the  Govern- 
ment whereas  Shri  Rajmohan  Gandhi  felt  that  accord- 
ing to  the  Censor  blank  space  signified  disapproval  of 


Governmental  policies.  Since  the  Government  also 
wanted  favourable  articles,  one  way  of  forcing  journals 
to  carry  such  stories  was  by  not  allowing  them  to 
keep  spaces  blank. 

7.  Censorship  during  Elections 

6.37  When  elections  were  announced  on  18th 
January,  1977,  censorship  was  relaxed  and  censoi'- 
ship  laws  were  held  in  abeyance.  Even  then  an 
effort  was  made  to  maintain  control  over  the  activities 
of  the  press.  The  Government  tried  to  pressurise 
the  press  by  giving  informally  'off  the  record'  warn- 
ings by  veiled  threats  o'f  what  would  happen  to  them 
after  the  elections  if  they  did  not  comply  with  the 
directions  of  the  Government,  by  asking  that  certain 
articles  should  be  published  and  by  enforcing  the 
Code  of  Ethics. 

6.38  According  to  Shri  Girilal  Jain,  Editor  oi 
'Times  of  India',  Smt.  Gandhi  tried  to  persuade  the 
editors  to  constitute  a  supervisory  committee  to  over- 
see the  working  of  the  press.  To  do  this  a  Code  of 
Ethics  was  drafted  by  the  officials  of  the  Ministry; 
journalists  had  very  little  to  do  with  it,  and  had  not 
accepted  it  as  the  Code  of  Ethics  was  quite  restric- 
tive. 

6.39  Shri  Nikhil  Chakravarty  in  his  testimony  has 
explained  how  the  Code  of  Ethics  was  passed  in  the 
absence  of  .veteran  and  senior  journalists,  who  were 
the  members  of  the  Committee  of  Editors  and  who 
had  tabled  a  large  number  of  amendments  to  this 
Code,  which  had  been  drafted  by  I&B  Ministry  offi- 
cials. Subsequently  Shri  Shukia  got  the  All  India 
Newspaper  Editors  Conference  also  to  approve  of 
this  Code.  According  to  Shri  Chakravarty,  Shri 
Shukia  wanted  to  have  the  Code  of  Ethics  made  into 
a  Jaw  but  the  Cabinet  opposed  it.  According  to 
Shri  Chakravarty  and  Shri  H.  Karlekar,  Editor  of 
'Hindustan  Times',  none  of  the  journalists  or  their 
organisations  had  accepted  the  Code. 

6.40  Shri  L.  Dayal,  Principal  Information  Officer 
to  the  Government  of  India'  admitted  that  there  wps 
opposition  from  the  journalists  to  the  Code  of  Ethics 
because  its  origin  and  source  were  tainted.  Shri  V,  C. 
Shukia,  the  then  Minister  for  Information  and  Broad- 
casting while  tracing  the  history  of  the  evolution  of 
the  Code  of  Ethics  said  that  the  suggestion  for  putt- 
ing into  practice  this  Code  came  from  the  members' 
of  the.  Central  Committee  o'f  Editors.  This  Centra! 
Committee  of  Editors  was  nominated  by  the  Govern- 
ment of  India  and  was  supposed  to  be  a, representa- 
tive body.  Shri  Shukia  admitted  that  the  Code  of 
Ethics  was  approved  by  the  Editors  at  a  meeting  in 
Calcutta  where  some  of  the  Editors  who  had  suggest- 
ed amendments  could  not  be  present.  Shri  Shukia 
emphasised  that  this  Code  was  accepted  by  most  of 
the  professional  bodies  of  the  industry  and  that  no- 
body made  any  serious  objection  to  this  Code. 

6.41  Shri  S.  Sahai,  Editor,  Statesman  and  Shri  Ajit 
Bhattacharya,  Deputy  Chief  Editor  of  the  Indian 
Express  told  the  Commission  how  during  the  elec- 
tions they  were  given  informal     warnings     by     Shri . 


5355S^'i2SSSE^'i*^M*/«-.;«..'1aiii-1   ...^.-A^^.^^igi^^.i^,^:..,.^;:^.-;-^?^^^^ 


39 


L,  Dayal,  the  Principal  Information  Officer  and  Shri 
H.  J.  D'Penha,  Chief  Censor  respectively  regarding 
the  'type  of  articles  and  stories  that  were  appearing 
in  their  papers.  Shri  Bhattacharya  also  said  that 
Shri  K.  N.  Prasad,  Additional  Secretary,  Information 
and  Broadcasting  Ministry  had  also  informed  Shri 
R.  K,  Mishra,  General  Manager  of  the  'Indian  Ex- 
press' about  the  stories  they  were  carrying  about  the 
atrocities  committed  during  the  family  planning  cam- 
paign at  Rewasa  and  Pipali.  Shri  L.  Dayal  confirm- 
ed that  the  Government  was  angry  with  'Indian  Ex- 
press' and  the  'Statesman';  Shri  Shukla  had  told  'him 
that  as  the  'Statesman'  was  likely  to  be  partisan  he 
had  been  told  to  talk  to  Shri  Sahai  and  convey  the 
Minister's  impression  to. him. 

6.42  Shri  K.  N.  Prasad,  Additional  Secretary,  In- 
formation and  Broadcasting  Ministry  also  admitted 
having  conveyed  to  Shri  R.  K.  Mishra,  General 
Manager,  'Indian  Express'  the  Government's  views 
that  the  publication  of  the  article  concerning  atroci- 
ties committed  during  the  family  planning  programme 
at  Pipali  village  would  inflame  passions  when  the 
election  campaign  was  picking  up  momentum.  He 
also  admitted  that  family  planning  was  a  very  im- 
portant issue  in  the  election  campaign  and  that  certain 
parties  had  alleged  that  excesses  had  been  commitied 
by  the  Government  in  the  family  planning  programme. 
He  denied,  however,  that  he  was  motivated  by  any 
desire  to  assist  the  Congress  Party's  election 
campaign. 

6.43  Shri  H.  Karlekar  of  the  'Hindustan  Times' 
also  told  the  Commission  how  Shri  L,  Dayal,  P.I.O. 
and  Shri  K.  N.  Prasad,  Additional  Secretary,  made 
insistent  efforts  to  persuade  him  to  publish  an  article 
by  Prof.  Rashiduddin  Khan,  whose  main  theme,  . 
according  to  Shri  .  Karlekar,  was  that  the  Congress 
Party  was  the  one  best  suited  to  come  to  power.  Both 
Shri  Dayal  and  Shri  Prasad  admitted  to  speaking  to 
.Shri  Karlekar  about  this  article.  They  have  both 
denied  that  any  pressure  was  exerted  on  Shri  Karle- 
kar, and  both  have  also  said  that  they  did  not  read 
the  article  which  they  were  pressing  Shri  Karlekar  to 
publish. 

6.44  Ths  Additional  Secretary,  Shri  K.  N.  Prasnd, 
and  Chief  Censor  Shri  D'Penha  were  also  instructed 
to  keep  a  watch  oyer  the.  trend  and  tenor  of  the  press 
and  to  sec  how  they  were  behaving  after  relaxation 
of  the  censorship  laws.  According  to  Shri  L.  Dayal 
tin's  was  done  with  a  view  to  taking  possible  action 
against  such  papers  after  the  elections  were  over.  A 
daily  press  round  up  was  prepared  which  analysed  the 
contents  of  each  newspaper  and  this  analysis  was  sent 
amongst  others  to  the  Minister  of  I  &  B  and  to  the 
Prime  Minister's  Secretariat. 

'  6.45  During  the  period .  of  emergency,  legislation 
was  also  enacted  to  make  censorship  part  of  the  ordi- 
nary law  bT  the  land.  Thus  the  Prevention  of  Publi- 
cation of  Objectionable  Matter  Act  was  passed,  the 
Press  Council  of  India  was  abolished  by  an  ordin- 
ance and  a  bill  repealing  the  Parliamentary  Proceed- 
ings (Protection  of  Publication)  Act,  1956  was  pass- 
ed. According  to  Shri  B.  G.  Verghese,  former  Editor 
of  'Hindustan  Times',  the  purpose  of  this  legislation 
was  to  institutionalise  the  emergency. 


B.   OTHER  PRESSURES  ON  THE  PRESS 

1.  Directorate  oj  Advertisement  and  Visual  Publicity 
(DAVP) 

6.46  The  Directorate  of  Advertisement  and  Visual 
Publicity  (DAVP)  is  the  sox  advertising  agency  for 
the  Government.  A  numb§»df  public  sector  under- 
takings also  use  it  for  advertising  purposes.  The 
advertisement  policy  of  the  Government  had  been 
enunciated  in  Parliament  from  time  to  time  by  Minis- 
try of  Information  and  Broadcasting.  This  policy 
had  provided  that  there  would  be  no  discrimination 
on  political  ground  for  placement  of  Government  ad- 
vertisements. But  newspapers  which  indulged  in 
virulent  propaganda,  inciting  communal  passion  or 
offending  socially  accepted  conventions  o'f  decency  or 
morality  were  not  to  be  used  for  advertisements.  The 
distribution  of  advertisements  to  newspapers  was  to 
be  balanced  and  equitable  but  it  was  not  intended  to 
be  a  kind  of  financial  assistance  to  newspapers. 

6.47  The  Government  of  India  had  decided  to  re- 
view its  advertisement  policy  at  a  high-level  meeting 
held  in  the  room  of  Smt.  Indira  Gandhi,  the  then 
Prime  Minister  on  26th  July,  1975  which  was  also 
attended  by  Shri  V.  C.  Shukla  amongst  others.  Even 
before  this,  Shri  Shukla  at  a  Coordination  Committee 
Meeting  held  on  29th  June,  1976  had  asked  the  Prin- 
cipal Information  Officer  to  prepare  a  list  of  news- 
papers which  were  to  be  categorised  as  friendly, 
neutral  and  hostile. 

6.48  According  to  Dr.  A.  R.  Baji,  who  was  the 
Principal  Information  Officer,  the  categorisation  ori- 
ginally was  done  on  the  basis  of  the  news  and  com- 
ments appearing  in  newspapers  prior  to  the  declara- 
tion, of  emergency  and  soon  after  it.  Subsequent- 
ly a  narrower  study  was  done  on  the  yiews  reflected 
in  the  editorial  columns  of  newspapers  between  June 
12  to  June  26,  1975.  The  list  was  first  scrutinised 
by  Shri  Shukla  and  was  then  finalised  at  a  meeting  in 
Shri  K.  N.  Prasad,  Additional  Secretary's  room  and 
overall  rating  given  to  the  newspapers,  keeping  in 
view  its  attitude,  The  master  copy  of  this  list  was 
kept  in  the  personal  custody  of  Shri  K.  N.  Prasad. 
According  to  Dr.  Baji,  the  list  was  drawn  up  purely 
on  the  basis  of  the  attitude  of  newspapers  towards 
political  developments  and  of  their  proprietorial  affi- 
liations to  political  parties.  The  grading  of  friendly, 
neutral  and  hostile  given  to  a  particular  newspaper 
was  related  to  its  views  on  a  particular  political  party. 
According  to  Shri'  K.  N.  Prasad  this  grading  had 
nothing  to  do  with  any  political  party  but  was  purely 
in  response  to  its  attitude  towards  the  Government. 

6.49  A  note  of  Dr.  A.  R.  Baji  in  the  file  gives  an 
index  for  categorisation  of  newspapers  which  is  as 
follows: 


A    Friendly 

A + Positively 

friendly 


B  Hostile 

B  -fContinuously 
hostile 


A— Friendly  B— Less  hostile 

but  with  some  than  before 

reservations        * 


C  Neutral 

C4-Shiftfrom 
neutral    position 
towards  positive 
side 

C— Shift  from 
neutral    position 
towards    hostile 
attitude 


40 


Some  of  the  newspapers  in  the  A  +  list  are: — 

1.  Natun  Assamiya,  Assamese,  Assam. 

2.  Amrita  Bazar  Patrika,  English,  West  Bengal. 

3.  Nagrika,  Bengali,  Tripura, 

4.  Indian  Nation,  English,  Bihar. 

5.  Hindu,  English,  Tamil  Nadu. 
6-  Naveen  Duniya,  Hindi,  M.  P. 
7.  Hindustan,  Hindi,  Delhi. 

■  8.  Malayala  Manorama,  Malay alam,  Kerala. 
9.  Lokmanya,  Marathi,  Maharashtra. 
10.  Khaollo,  Manipuri,  Manipur. 

In  C  arid  C—  categories  are: —  , 

1.  Daccan  Chronical,  English,  A,  P. 

2.  Searchlight,  English,  Bihar. 

3.  Financial  Express,  English,  Maharashtra. 

4.  Pioneer,  English,  U.  P. 

5.  Gujarat  Samachar,  Gujarati,  Gujarat, 

6.  Navbharat,  Hindi,  M.  P. 

7.  Rajastha'n  Patrika,  Hindi,  Rajasthan. 

8.  Nav  Bharat  &  Praja  Vani,  Kannada,  Karna- 
taka. 

9.  Light,  Malayalam,  Kerala. 

10.  Suraj,  Punjabi,  Punjab. 

11.  Dina  Madar,  Tamil,  Tamil  Nadu. 

12.  Andhra   Bhoomi,   Telugu,   Andhra  Pradesh. 

13.  Chinar,  Urdu,  J&K. 

14.  Mehanat,  Urdu,  Punjab.  ' 

In  B  +  category  are: — 

1  ■.  Danik  Asom,  Assamese,  Assam. 

2.  Danik   Sambad,  Bengali,   Tripura. 

3.  Poona  Daily  News,  English,  Maharashtra. 

4.  Indian  Express,  English,  Tamil  Nadu. 

5.  Sandesh,  Gujarati,  Gujarat. 

6.  Pradeep,  Hindi,  Bihar. 

7.  Vir  Pratap,  Hindi,  Punjab. 

8.  Deshabhimani,  Malayalam,  Kerala. 

9.  Swadesh,  Hindi,  M.  P. 

10,  Kannada  Prabha,  Kannada,  Karnataka, 

11.  Navabharat,    Marathi,    Maharashtra. 


6.50  This  is  only  a  representative  list  and  there  were 
a  large  number  of  newspapers  and  other  journals  in 
virtually  all  languages  which  were  categorised  as  B 

orB  +■  '     -  ' 

*  6.51  Oflhe  national  dailies  published  in  English 
from  Delhi';  the  'Hindustan  Times'  and  'Times  of  India' 
were  given  A  and  A-grading  and  'Statesman'  and 
'Indian  Express'  B  grading  respectively. 

6.52  According  to  Shri  S.M.H.  Burney,  who  was 
Secretary  in  the  Ministry  of  Information  and  Broad- 
casting these  lists  were  prepared  on  the  basis  of 
instructions  received  from  the  Minister.  These  were 
oral  orders  of  the  Minister,  and  he  communicated  them 
in  writing  to  Shri  K.  N.  Prasad,  who  subsequently  got 
the  lists  prepared.  The  list  of  newspapers  and  maga- 
zines was  to  be  of  those  who  were  in  favour  of  I  he 
Government  and  also  of  those  who  were  anti-Govern- 
ment and  anti-Prime  Minister.  Shri  Burney  admitted 
that  he  did  not  know  the  kind  of  assessment  made  by 
the  P.I. O.,  but  he  was  clear  that  it  meant  opposing  the 
Government  and  not  the  Congress  Party,  though  he 
could  give  no  idea  as  to  the  nature  of  the  criticism  of 
the  Government  as  distinguished  from  that  of  the  party. 

6.53  Shri  V.  C.  Shukla  while  admitting  that  he  had 
given  directions  for  preparation  of  these  lists  said  that 
the  attitude  of  the  newspapers  was  to  be  adjudged  in 
the  light  of  their  general  cooperation  with  the  Govern- 
ment. According  to  him,  Dr.  Baji's  understanding  of 
the  task  entrusted  to  him  was  wrong  and  Government 
merely  intended  to  judge  a  newspaper's  cooperation 
from  the  background  of  its  attitude  towards  the  Govern- 
ment and  particularly  of  the  adjustment  that  it  had 
made  during  the  emergency. 

6.54  However,  from  the  evidence  which  is  available 
on  the  flies  of  the  DAVP  it  is  evident  that  political 
considerations  was  one  of  the  criteria  for  giving  adver- 
tisements. Thus  'Dastan-e-Wafan'  which  is  an  Urdu 
Journal  published  from  Delhi  had  its  advertisements 
resumed  after  notice  had  been  taken  by  Shri  K.  N. 
Prasad  and  Shri  V.  C,  Shukla  that  this  journal  had 
ceased  to  follow  a  pro- J  ana  Sangli  policy  and  was  now 
supporting  the  Congress. 

6.55  Similarly  in  the  case  of  'Lok  Raj'  of  Bhav 
Nagar,  Gujarat,  advertisements  were  stopped  when  a 
complaint  was  received  that  this  publication  was  sup- 
porting Congress  (O)  policies.  Subsequently  an  inquiry 
was  made  through  the  PIB  and  during  the  course  of 
this  inquiry  it  was  found  that  it  was  a  pro-Congress 
paper,  and  Shri  Shukla  ordered  resumption  of  advertise- 
ments to  this  journal  on  15th  May,  1976. 

6.56  'Alai  Osai'  a  Tamil  Daily  was  being  used  on 
a  restricted  basis  by  the  DAVP  because  it  was  allegedly 
Pro-DMK.  In  February  1976  Shri  M.  Bhaktavatsalam 
requested  Shri  V.  C.  Shukla  that  'Alai  Osai*  should 
be  given  more  advertisements.  Accordingly  the  num- 
ber of  advertisements  to  this  daily  was  stepped  up, 
In  April  1976,  however,  on  receipt  of  a  complaint  from 
Shri  V.  Vishwanathan,  M.P.,  that  the  'Alai  Osai'  was 
staunchly  pro-DMK,  the  issue  of  advertisements  to 
this  daily  was  stopped.  In  October  1976  on  receipt 
of  a  letter  from  Shri  E.V.K,  Sampath,  Vice-President 


.-■^-^WJffi^tfJ&IK^ 


e/rirl  ;■  '-:-^>  \-:.  .'.  l.V^  ,;i--'-.. ;' -'.■-■  ji*;^'-? .-V.v.  -.  L 


41 


of  the  Tamil  Nadu  Congress  Committee  that  some 
Congressmen  had  purchased  this  daily,  advertisements 
to  this  daily  were  resumed.    A    number    of    official; 

weeklies  of  the  Congress Party  were  given  extensive 

advertisement  support,  while  that  to  official  journals  of 
the  opposition  came  down.  The  following  table  illus- 
trates the  amount  of  advertising  support  given  to 
Congress  Party  journals  vis-a-vis  some  of  the  opposi- 
tion party  journals  : 


Name  of  the  Party 

Name  of  the 
Journal 

Period 

Circula- 
tion 

Expendi- 
ture 
(Rs.) 

1.  Congress  Party 

1.  Socialist 
India 

1974-75 
1975-76 
1976-77 

1881 
1062 
3521 

3,188 

18,647 

1,11,740 

;. 

2.  Socialist 
Bharat 

1974-75 
1975-76 
1976-77 

3660 
2902 

.14,918 
1,05,236 

' 

3.  Sab  Saath  1974-75 
1975-76 
1976-77 

2400 
1443 

1443 

2,718 

6,555 
52,623 

2,  Communist 
Party  of  India 

I .  New  Age 

1974-75 
1975-76 

1976-77 

12,783 
12,340 
14,496 

3,668 
21,250 

11,106 

< 

2.  Hayat 

1974-75 
1975-76 
1976-77 

1866 
1883 
1883 

736 
3,366 
2,879 

3.  Communist 
Party  of  India 
(Marxist) 

1.  Ganashakt 

i  1974-75 
1975-76 
1976-77 

12,8911 
12,891 
Not  used 
between 
1-2-76 
to 

1^957 

11,442 

1,524 

:;';■/  .' 

23-3-77, 

1 

4i|  -Bhartiya  Jarta 
Sangria 

1.  Mother 
Land 

1974-75 
1975-76 
1976-77 

14,335 
Publicatio 
ceased 

13,728 
n 

5.  Praja  Socialist 
■  Party 

1.  Janata 

1974-75 
1975-76 
1976-77 

1477 

1587 

Not  used 

450 
98 

■  6.57  Thus  it  is  apparent  that  contrary  to.  the  policy 
enunciated  by  the  Government  on  the  Floor  of 
Parliament,  political  considerations  were  taken  into 
account  while  releasing  advertisements. 

6.58  The  Government  during  this  period  utilised 
its  advertising  policy  as  a  source  of  financial  assistance 
or  denial  of  financial  assistance  to  newspapers  etc.  in 
complete  variance  with  the  policy  which  it  had 
enunciated  on  the  Floor  of  the  Parliament.  News- 
papers and  journals  which  were  critical  of  the 
Government's  policies  were  denied  advertisements 
whereas  others  like  Amrit  Bazar  Patrika  and  National 
Herald  which  were  regarded  as  being  supporters  of 
Government  policies  were  given  advertisements  beyond 
their  legitimate  due. 

6.59  Thus  according  to  Shri  Romesh  Thapar,  Air 
India  stopped  giving  advertisements  to  'Seminar' 
magazine  as  soon  as  the  order  of  pre-censorship  was 
issued  on  'Seminar'  for  some  articles  containing 
allegedly  objectionable  material  Soon  after  ..a  private 
sector  firm  told  Shri  Thapar  that  its  management  had 
received  messages  that  advertisements  should  not  be 
released  to  'Seminar'. 


6.60  Shri  Rajmohan  Gandhi  has  also  stated  that 
soon  after  the  Government  started  .  taking  adverse 
notice  of  'Himmat'  magazine  all  advertisements  from 
DAVP  and  other  Government  agencies  like  Banks 
and  Airlines  were  stopped.  When  Shri  Rajmohan 
Gandhi  inquired  from  Air  India,  the  Bank  of 
Maharashtra  and  Dena  Bank  as  to  why  his 
advertisements  had  been  stopped,  he  was  told  that 
the  Government-  had  placed  him  on  the  prescribed 
list. 

6.61  On   the   other   hand,    Antrim  Bazar  Patrika 
was     categorised    as    A    plus     (meaning    positively 
friendly)  according  to  Dr.  A.  R.  Baji,  in  the  list  of 
'friendly,  hostile  and  neutral'  newspapers.     Dr.  Baji 
told  the  Commission  that  A  plus,  positively  friendly, 
grading  was  given  to  those  newspapers  which  went  all 
out  to  support  the  party  in  power  or  liie  Government. 
To  use  Dr.  Baji's  phrase,  they  were  'whole-hoggers'. 
Amrita  Bazar  Patrika  was  given  a  mid-term  revision 
of  rates  by  Shri  V.  C.  Shukla  w.e.f.  9th  October,  1975. 
According  to  Shri  Shukla  this  was  done  on  the  specific 
recommendation  of  DAVP.     The  DAVP  (Shri  Sethi)/ 
has  noted  on  the  file  in  October  1975  that  Amrita 
Bazar  Patrika    had    asked    for  a  higher    rate.    In 
August,  1975    the    DAVP    had    recommended  that 
Amrita  Bazar  Patrika  should  be  given  the  same  rate 
as  that  of  the  'Hindustan  Times'  as  the  circulation  of 
combined  edition  was  the  same  as  the  'Hindustan 
Times*.    When  the  DAVP  made  a  note  on  the  file 
he  also   said   that  the  circulation   of  Amrita  Bazar 
Patrika  had  come  down  by  5,000  copies  since  its 
recommendation  of  August,  1975  and  that  normally 
upward  revision  of  rates  is  not  agreed  to  unless  there 
is    a    corresponding    increase    in    circulation.    The 
quantum  of  advertisement  released  to  this  newspaper 
in  1-975-76  was  Rs.  9,22,313  as  against  Rs.  4,57,340 
in  1974-75.     In  1976-77,  the  quantum  of  advertise- 
ments showed  a  further  increase  to  Rs.  10,10,696. 
Shri  V.  C.  Shukla    told    the^  Commission    that    he 
regarded  the    request  of  Amrita    Bazar    Patrika  for 
increase  in  quantity  of  advertisements  as  a  'claim' 
on    the    Government.     He     also    said    that   it  was 
supporting  nationalistic  policies. 

6.62  Similarly,  National  Herald  was  given  an  A 
plus  rating  and  quantum  of  advertisement  given  to 
the  National  Herald  Delhi  Edition  alone  is  indicated 

in  the  following  table  : — 


1974-75        1975-76        1976-77 


Circulation 
Amount  (Rs.) 


1  i  ,048 
17,298 


10,880 
66,327 


10,831 
1,32,917 


6.63  For  all  editions  of  National  Herald  the  figures 
regarding  quantum  of  advertisements  are  as  follows:' 


1974-75 

Rs.  2,51,304 

1975-76 

Rs.  4,99,589 

1976-77 

Rs.  8,70,555 

6.64  According  to  Shri  Shukla  the  Government 
had  laid  down  certain  criteria  and  they  tried  to  apply 
them  as  fairly  as  possible  and  to  the  best  of  jts 
ability.  Shri  Shukla  also  did  not  comment  on 
individual  cases  and.    said     that    Commission  could 


■42 


come  to  its  own  conclusions  from-  the  record.  He 
also  said  that  they  may  have  applied  the  guidelines 
wrongly  and,  therefore,  erred, 

6.65  On  15th  September,  1976,  a  policy  note  was 
issued  by  Shri'K.  N.  Prasad,  Additional  Secretary, 
which  he  said  was  issued  after  consulting  the  Minister 
Shri  V.  C.  -Shukla.  The  policy  note  authorised  the 
DAVP  to  canalise  advertisements  of  all  Central 
Government  Ministries,  Departments,  Public  Sector 
Undertakings  and  nationalised  autonomous  bodies. 
It  was  realised  that  the  State  Governments  may  not 
agree  to  have  their  advertisements  canalised  through 
the  DAVP  but  it  was  noticed  that  the  .Centre  could 
advise  them  to  discontinue  advertisements  to  delisted 
newspapers.  The  DAVP  was  also  directed  to  ensure 
that  whenever  any  paper  was  delisted,  the  publication 
of  those  advertisements  which  had  already  been 
released  should  be  prevented.  The  DAVP  was  also 
asked  to  tactfully  explore  the  possibility  of  private 
advertising  agencies  denying  advertisements  to  delisted 
newspapers.  Shri  Prasad  could  not  explain  the  basis 
on  which  the  listing  or  delisting  was  done  by  the 
DAVP.  He  also  admitted  that  he  did  not  make,  any 
inquiry  from  the  DAVP  whether  declaration  made  on 
the  Floor  of  the  Parliament  by  the  Government  was 
being  violated  either  in  words  or  in  spirit  when  he 
made  this  recommendation. 

6.66  Regarding  the  possibility  of  private  advertising 
agencies  denying  advertisements  to  delisted  news- 
papers. Shri  Prasad  said  trial  the  DAVP  failed  to 
persuade  the  private  agencies  to  fall  in  line  and, 
therefore,  Shri  Shukla  himself  met  the  representatives 
on  5th  February,  1977.  The  minutes  of  this  meeting 
which  was  held  on  February  5,  1977  reveal  that 
private  advertising  agencies  agreed  to  fall  in  line 
with  the  Government's  policies  on  release  of 
advertisements. 

6.67  From  the  above  it  is  evident  that  the 
Government's  assurance  on  the  Floor  of  the 
Parliament  that  political  affiliations  would  not  be 
taken  into  consideration  while  giving  advertisements 
and  the  advertisements  would  not  be  regarded  as 
source  of  revenue  or  financial  assistance  to  news- 
papers, were  both  disregarded  in  the  actual 
implementation  of  the  policy.  The  liberal  grant  of 
advertisements,  to  so-called  friendly  periodicals  raised 
the  total  expenditure  of  DAVP  advertisements  on 
newspapers  from  Rs.  1,42,30,238  in  1974-75  to 
Rs.  2,20,68,897  in  1975-76  to  Rs.  2,79,45,942  in 
;1976-77.  During  the  same  period  89  newspapers 
and  periodicals  were  denied  advertisements  mostly  on 
political  grounds  for  varying  lengths  of  time. 


2.  Formation  and  Functioning  of  'Samachar' 

6.68  The  first  indication  that  the  Government  was 
intending  to  reorganise  the  existing  four  news  agencies, 
namely,  U.N.I.,  P.T.I.,  Hindustan  Samachar  and 
Samachar  Bharati  was  apparent  at  Smt.  Indira 
Gandhi's  high-level  meeting  of  26th  July,  1975. 
Subsequently  at  another  high-level  meeting  held  by 
Smt.   Gandhi  on  August   12,    1975   which   was   also 


attended  by  Shri  V.  C.  Shukla,  Minister  for  I&B,  the 
pros  and  cons  of  restructuring  the  news,  agencies  into 
a  statutory  body  or  trust  were  considered. 
Accordingly  the  Ministry  drew  up  an  ordinance  for 
approval  of.  the  Cabinet  for  merging  the  news  agencies 
into  a  single  statutory  body.  The  Cabinet  did  not 
accept  the  ordinance  and  decided  that  the  agencies 
should  be  made  to  merge  without  recourse  to  law 
and  other  methods  should  be  tried. 

6.69  According  to  Shri  L.  Dayal,  who  was  the 
P.I.O.,  Shri  Shukla  interpreted  the  expression  'other 
methods'  to  mean  that  pressure  would  be  put  on  the 
news  agencies  by  way  of  All  India  Radio  no  longer 
subscribing  to  the  news  agencies,  by  not  hiring 
teleprinters  of  the  news  agencies  and  vigorous 
recoveries  of  the  dues  of  the  Government.  According 
to  Shri  Dayal  the  inference  could  be  drawn  from 
subsequent  events  that  the  intention  of  having  these 
news  agencies  merged  into  one  unit  was  to  control 
their  functioning  and  that  decisions  regarding  this 
merger  was  taken  at  the  Prime  Minister's  level. 
According  to  Shri  Shukla  no  decisions  were  taken  in 
the  Prime  Minister's  meeting  but  the  discussions  held 
there  helped  them  to  clarify  their  minds  as  to  what 
should  be  the  best  form  to  achieve  the  objective. 
According  to  him  he  had  understood  the  Cabinet's 
decision  to  try  'other  methods*  to  mean  persuasion, 
mobilisation  of  public  opinion,  opinion  of  professional 
bodies,  opinion  in  Parliament  and  opinion  of '  the 
workers  of  the  news  agencies. 

6.70  He  also  said  that  it  was  purely  coincidental 
that  the  teleprinter  connections  to  Government  offices 
Were  disconnected  when  discussions  regarding  merger 
were  going  on.  He  also  said  that  Government  showed 
indulgence  to  the  agencies  in  not  recovering  the  dues 
of  the  P&T  Department  because  of  their  tight  financial 
position.  He  said  this  indulgence  was  a  form  of 
patronage  and  when  they  decided  that  there  would 
be  no  more  patronage  the  P&T  Department  started 
realising  its  dues.  He,  however,  did  not  know  the . 
exact  terms  of  the  agreement  between  the  agencies 
and  the  P&T  Department. 

6.71  As  regards  AIR  dues,  Shri  Shukla  said  that 
the  agreement  with  the  agencies  had  expired.  A  new 
agreement  was  negotiated  and  the  terms  settled.  The 
agreement  was,  however,  not  signed  and  whatever 
payments  were  made,  were  made  on  an  ad  hoc  basis. 
Considering  that  the  ways  and  means  position  of  the 
agencies  was  bad,  a  payment  of  Rs.  5  lac  was  made 
to  them  on  a  purely  ad  hoc  basis. 

6.72  Shri  Mirchandani,  Editor  and  General 
Manager  of  U.N.I,  said  that  the  rejection  of  fhe 
ordinance  was  taken  as  a  set-back  by  Shri  V.  C. 
Shukla  and  therefore  he  resorted  to  harassment  of 
the  managements  of  the  news  agencies  to  force  them 
to  merge.  Shri  Mirchandani  said  that  he  had 
consistently  opposed  the  merger  and  he  had  personally 
displeased  Shri  V.  C.  Shukla  because  he  believed  that 
he  was  instrumental  in  getting  the  Cabinet  to  reject 
the  proposal.  He  had  gone  so  far  as  to  meet 
Shri  Sanjay  Gandhi  in  his  attempts  to  stall  the  merger, 
Hence  he  was  forced  into,  retirement  on  Shri  Shukla's 
insistent  demands.     Dr.  Ram  Tarneja,  Chairman  of 


iViv'l?*'  ;•  ■ : *yi,-. •.•<«»:"-.-.■„  t£ >.,■  -  .' ,.:-.-  '  ■::.-. Uw  <K; »r«i  ■:'-: SMI£>\-i; ;■;::;, 


.   £,„,;,,„-j....,,.-;~ ,     :-_:;.L^:lll:.::iJ^^A;::^^..^l:;...t. .  ^.Hii.-.tii,,;..;^!,..;^!;;        •:.■■:«  SuiK*.  :J  ,.SU^^iii!:iii^..i-.^ij..  . 


43 


the  UNI  confirmed  that  he  was  put  to  undue  pressure 
from.  Shri  Shukla  for  obtaining  Shri  Mirchandani's 
■  retirement, 

6.73  According  to  Shri  Shukla,  he  was  aware  that 
Shri  Mirchandani  had  opposed  the  merger,  but  said 
that  this  was  because  oC  his  long  service  in  UNI, 
Shri'  Mirchandani  had  become  the  de  facto 
administrator  and  had  developed  vested  interests  in 
the  continuance  of  the  UNI.  Shri  Shukla  also  said 
that  it  was  felt  that  a  person  who  had  no  faith  in  a 
unified  national  news  agency  would  be  a  hinderance 
to  a  unified  set  up. 

6.74  Shri  P.  C.  Gupta,  who  was  Chairman  of  the 
Board  of  Directors  of  PTI,  Dr.  Ram  Tarneja, 
Chairman  of  the  UNI  Board  have  both  stated  that 
pressure  was  put  on  them  by  cutting  off  teleprinter 
lines,  non-payment  of  All  India  Radio  dues,  adverse 
publicity  given  in  the  Press  regarding  their  allegedly 
outstanding  dues,  etc.  Shri  Shukla  admitted  that 
-from  the  time  Cabinet  directed  him  to  try  'other 
methods'  on  December  13,  1975,  to  the  time  they 
bore  fruit  on  January  24,  1976,  that  is,  a  period  of 
1  month  and  11  days,  the  agencies  were  compelled, 
induced  or  persuaded  by  so-called  'other  methods' 
to  join  in  the  scheme  of  merger;  but  he  said  that  it 
was  not  correct  to  say  that  the  entire  thing  materialised 
in  one  month  and  13  days,  that  it  was  the  final  stage 
of  the  effort  that  took  shape  after  the  Cabinet  meeting 
of  December  13,  1975. 

v 6-75  The  functioning  of  Samachar  during  the' 
Emergency  both  administratively  and  editorially  was 
Supervised  by  Government.  According  to  '. 
Shri  G.  Kasturi,  who  was  Chairman  of  the  Samachar 
Board,  thure  was  no  interference  of  the  Government 
in  the  working  of  Samachar,  but  from  time  to  time 
the  Government  and  Shri  Shukla  made  suggestions 
which  one  had  to  consider  because  the  Government  was 
in  it  from  the  very  beginning  and  they  required  its 
assistance  for  putting  Samachar  on  its  feet.  However, 
from  the  documents  available  with  the  Ministry  •  of 
Information  and  Broadcasting  it  is  apparent  that 
Shri  Kasturi  did  consult  Shri  K.  N.  Prasad  regarding 
advice  he  had  given  to  Shri  Mohd.  Yunus  about  the 
constitution  of  three  Samachar  Committees.  Similarly, 
Shri  Prasad  had  got  agenda  points  cleared  by 
Shri  Mohd.  Yunus  and  Slid  V.  C.  Shukla,  so  that 
Shri  Yunus  could  take  further  action  upon  them  at 
meetings  of  the  Managing  Committee  of  the  Samachar. 
The  proceedings  of  the  Samachar  Board  meeting  were 
also  being  sent  to  Shri  K.  N.  Prasad.  Shri  W.  Lazarus, 
who  was  the  General  Manager  of  the  Samachar  also 
admitted  having  supplied  lists  of  Samachar  personnel 
for  verification  by  Government  agencies.  Shri  Lazarus 
also  said  that  he  was  frequently  in  touch  with 
Government  on  matters  relating  to  finances  but  he 
did  not  take  any  direction  from  the  Government  on 
any  matter. 

.  6.75A  Shri  P.  C.  Gupta  and  Dr.  Ram  Tarneja,  botfi 
members  of  the  Samachar  Committee  stated  that 
Samachar  was  being  ordered  continuously  in  respect 
of  various  matters  concerning  its  administration  by 
the  Government. 


6.76  As  regards  editorial  control,  various  members 
of  the  editorial  staff,  Shri  P.  S.  Kasbekar, 
Shri  C.  P.  Maniktala,  Shri  C.  K.  Arora, 
Shri  D.  V.  Desai  and  others  have  testified  that 
instructions  were  received  from  the  Government  and 
from  other  .authorities  about  giving  proper  coverage 
to  Government  and  Congress-,Party  activities,  and  also 
to  keep  coverage  of  opposition  activities  on  a  low 
key.  In  particular,  during  the  election  campaign  this 
imbalance  of  news  was  accentuated.  The  type  of 
stories  put  out  by  Samachar  can  be  seen  from  the 
original  stories  and  their  edited  versions.  Photo 
copies  of  a-  few  illustrative  examples  are  attached  as 
appendices  to  this  Chapter.  Shri  Lazarus,  Member 
Editorial  and  General  Manager  of  the  Samachar  and 
Dr.  Raj  K.  Nigam,  Executive  Member  of  the  Samachar 
Board  used  to  attend  coordination  meetings  which 
were  held  by  Shri  S.  M.  H.  Burney  in  the  Ministry 
of  Information  and  Broadcasting  during  the  election 
campaign. 

6.77  Shri  K.  N.  Prasad,  Additional  Secretary,  stated 
that  while  he  was  not  aware  of  any  interference  by 
the  Ministry  in  the  editorial  freedom  of  Samachar, 
there  would  be  instances  of  Samachar  receiving 
instructions  in  regard  to  news  meant  for  censorship 
and  Press  release.  Shri  Lazarus  denied  that  he  had 
ever  given  instructions  to  play  up  Government  and 
Congress  Party  news  arid  to  keep  coverage  of 
Opposition  parties  on  a  low  key.  He  only  issued 
instructions  that  sensitive  copies  should  be  referred 
to  him  and  he  never  regarded  Samachar  as  a  mere 
channel  for  carrying  out  Government  versions-  of 
stories.  However,  certain  instances  of  tailoring  of 
stories  to  suit  the  Government's  needs,  for  example, 
the  story  regarding  Shri  Jagjivan  Ram's  resignation 
from  the  Congress,  were  put  to  Shri  Lazarus  and  he 
affirmed  that  this  had  been  done  at  the  instance  of 
Shri  Shukla. 

3.  Harassment  of  Journalists 

6.78  To  enable  the  Press  to  cover  the  activities 
of  the  Government  accreditation  to  Government  of 
India  is  granted  to  correspondents  and  news  camera- 
men based  in  Delhi.  The  accreditation  was-  governed 
by  two  sets  of  rules  for  correspondents  and  camera- 
men respectively.  In  addition  the  decision  of  the 
Central  Press  Accreditation  Committee  was  treated  as 
a  convention  and  was  followed  in  deciding  individual 
cases.  In  February,  1976,  the  Government 
reconstituted  the  accreditation  -  committee  and  the 
number  of  Government  nominees  was  raised  from 
two  to  three  in  a  total  committee  of  1 1 . 

6.79  During  the  period,  following  declaration  of 
Emergency,  accreditation  of.  a  number  of  correspon-. 
dents  was  terminated  and  a  bulk  of  these  'decisions 
was  taken  as  a  part  of  a  review  which  was  endorsed 
by  the  Central  Press  Accreditation  Committee  at  its 
meeting  held  in  February,  1976.  At  this  meeting 
number  of  deletions  were  suggested  by  the  then 
Principal  Information  Officer,  Dr.  A.  R.  Baji,  on  the 
basis  of  a  decision  of  the  Government. 

6.80  According  to  Shri  K.  N.  Prasad  in  February 
1976,  Shri  Shukla  gave  cyclostyled  list  of  Accredited 
Correspondents   and  he  was  ordered  that  a  record 


check  should  be  made  of  those  who  were  associated 
with  banned  organisations.  Shri  Prasad  got  this  done 
from  the  Intelligence  Bureau  and  then  returned  the 
list  to  the  Minister.  A  note  on  the  file  by 
Shri  Prasad  shows,  that  the  list  was  seen  by  the 
Minister  and  he  approved  of  the  principles  arid 
guidelines  to  be  adopted  for  granting  accreditation. 
Thirty-three  correspondents  were  dis-accreditated, 
the  reasons  for  some  of  them  were  the  adverse 
verification  reports  and  for  others  their  anti-establish- 
ment stances.  All  these  cases  were  approved  by  the 
Minister.  Shri  Shukla  admitted  that  he  had  given 
instructions  for  getting  the  verification  of  the 
antecedents  of  correspondents  done. 

6. 81  Shri  Prasad  also  admitted  to  having  charactet 
and  antecedents  of  a  number  of  journalists  verified 
by  the  Intelligence  Bureau.  He  said  that  this  was 
done  at  the  instance  of  the  Minister,  but  did  not 
know  the  reasons  why  it.  was  done. 

6.82  As  regards  foreign  correspondents,  a  number 
of  restrictions  were  placed  on  them  to  make  them 
conform  to  Government  policy;  for  instance,  they 
had  to  sign  a  bond  agreeing  to  abide  by  the 
precensorship  laws.  According  to  Shri  Shukla, 
Minister  for  Information  and  Broadcasting,  it  was  the 
Government  policy  that  the  law  should  apply  equally 
to  both  foreign  correspondents  as  well  as  Indian 
correspondents  and  if  they  wanted  to  operate  in  India, 
they  had  to  conform  to  the  laws  of  the  land. 

6.83  The  Indian  representatives  of  foreign  journals 
were  subjected  to  great  harassment,  for  example, 
Shri  Ramanujam,  who  was  the.  representative  of  the 
'Newsweek'  magazine  of  USA  had  his  telephone  cut, 
his  accommodation  taken  back  and  his  accreditation 
withdrawn  in  spite  of  the  fact  that  'Newsweek' 
expressly  told  the'  Government  of  India  that 
Shri  Ramanujam  was  not  responsible  for  any 
participation  in  any  'Newsweek'  reporting  from  India 
since  censorship  was  imposed. 

C.   FUNCTIONING   OF   GOVERNMENT   MEDIA 
UNITS 

6.84  The  Government  Media  Units  had  two  main, 
functions  during  the  Emergency.  They  were  at  once 
a  source  of  patronage  and  also  they  were  used  for 
building  up  the  image  of  a  political  party  and  a  few 
of  its  leaders. 


1.  DAVP 

6,85  The  DAVP  was  used  on  a  large  scale  for 
giving  advertisement  support  to  various  souvenirs 
brought  out  by  the  Congress  Party.  Opposition 
parties  were  denied  any  such  patronage  Thus 
during  the  year  1974-75,  1975-76  and  1976-77,  the 
Congress  Party  and  its  various  wings  received 
advertisement  support  from  the  DAVP  alone  worth 
Rs.  3,868,  Rs.  52,615  and  Rs.  80,325,  respectively; 
whereas  the  opposition  parties  during  the  same  period 
received  Rs.  1,403,  Rs.  1,700  and  Rs.  nil,  respectively. 


6.86  Not  merely  was  the  Congress  Party  given 
extensive  advertising  support  but  there  was  an  instance 
when  rates  per  page  for  souvenirs  were  increased  after 
they  had  been  agreed  upon  and  the  souvenirs  printed. 
Thus,  the  rate  fixed  for  advertisements  for  'the 
souvenirs  brought  out  on  the  occasion  of  the  All  India 
Congress  Committee  meeting  at  Delhi  was  originally 
Rs.  1,000  per  page.  Twenty  advertisements  were 
released  at  this  rate  on  the  orders  of  Shri  V.  C.  Shukla 
on  May  18,  1976.  On  June  15,  1976,  the  Delhi 
Pradesh  Congress  Committee  submitted  a  bill  for 
Rs.  40,000  at  Rs.  2,000  per  page.  Shri  C.  K.  Sharma, 
Private  Secretary  to  Shri  V.  C.  Shukla,  instructed  the 
DAVP  to  make  the  payment  at  the  enhanced  rates. 
He  said  that  he  had  instructed  the  DAVP  to  make  the 
payment  after  he  had  consulted  the  Minister. 

6.87  Shri  Shukla,  the  then  Minister  for  Information 
and  Broadcasting,  stated  that,  regarding  giving  of 
advertisements  for  souvenirs,  the  Government  had 
strictly  followed  the  guidelines  laid  down  to  the  best 
of  its  ability  and  that  he  had  nothing  more  to  add. 


2,  All  India  Radio 

6.88  According  to  Shri  S.  C.  Bhatt,  Director,  News 
Services  Division,  All  India  Radio,  rigid  constraints 
were  imposed  on  All  India  Radio  after  the  imposition 
of     Emergency.     He     said     that     throughout     the 
Emergency    period  it  was  the  Government's  policy  to 
play  up  the  speeches  of  Smt.  Indira  Gandhi  and  heT 
son,  Shri  Sanjay  Gandhi.     He  stated  that  written  a'rrd 
unwritten  instructions  were  frequently  received  by  AH 
India  Radio  from  the  Minister  himself  and  sometimes 
also  directly  from   the  Prime  Minister's   Secretariat. 
In,,  all,  Smt.   Gandhi's  prpnounc.errients  were  carried 
*jn47Lgccasions  on.jiew.sreels.and  Samachar  Darshan' 
programmes  arid,  Shri.  J>anjay_  GandhLfigured  24  times' 
on.-4heae.^r)rogrj.irjrnes„     Besides,     All     India  Radio" 
gave..wide     publicity     to     Shri     Sanjay     Gandhi  arirJ 
L9.2_itetns  we're 'carried  on  Shri  Sanjay  Gandhi  in  the 
main    news -bulletins   broadcast  between   January   1 
lS2£_a»d     January     18,     1977.     A  few  illustrative1 
examples  of  the"- type     of     coverage  on  Shri  Sanjay 
Gandhi  are  given  below  ; — 

(i)  "Earlier  on  his  arrival  in  Bhopal, 
Shri  Gandhi  was  given  a  rousing  welcome 
by  a  large  crowd  of  men,  women  and 
children". 

[A.l.R.  News:  February  26,  1976—2100  Hrs.J. 

(ii)  "Mr.  Sanjay  Gandhi  was  taken  in  a  big 
procession  through  the  streets  of  Guntur  to 
the  police  parade  ground", 

[A.l.R.  News:  March  21,      1976—0810  Hrs,]. 

(Hi)  "Hundreds  of  thousands  or  people  lined  up 
the  roads  in  Tirupati  and  Tirumalai  to 
cheer  Mr.    Gandhi". 

[A.l.R.  News  :  March  21,   1976—2100  Hrs.], 

(iv)  'The  Youth  Congress  leader  Mr.  Sanjay 
.Gandhi  had  discussions  with  officials  in 
'Agra  today  on  plans  to  beautify  and  clean 
Me  historic  city",  "earlier  on  arrival  in  Agra 


-;:}.-.  I  -     .J.    ."       .     *  L      .  -  *   I  *.».    .iJWi, 


45 


Mr.    Gandhi    was    given    an    affectionate 
welcome  by  a  big  crowd". 

[A.I.R.  News  :  May  2,  1976—2100  Hrs.]. 

(v)  "On  arrival  at  Bombay  Airport  Mr.  Sanjay 
Gandhi  was  accorded  a  big  welcome.  The 
Maharashtra     Chief     Minister,   Mr.   S.   B. 

Chavan,  his  Cabinet  colleagues  and 

many  Congress  and  Youth  Congress  leaders 
received  him  at  the  Airport.  He  was 
profusely  garlanded  on  behal'f  of  several 
organisations.  Several  organisations  gave  a 
grand  welcome  to  Mr.  Sanjay  Gandhi  all 
along  the  route  from  the  Airport." 

■     [A.I.R.  News  :  October  29,  1976—2100  Hrs.]. 

(vi)  "The  AIR  correspondent  says  that  lakhs  of 
people  turned  up  in  Karna'l  to  greet  Mr. 
Sanjay  Gandhi.     The  town  wore  a  festive 

look". 

[AJ.R.  News  :  January  11,  1977—2100  Hrs.]. 

6.89  Shri  Bhatt  also  said  that  the  AIR  news  was 
used  for  broadcasting  inspired  news  denigrating  Con- 
gress leaders  who  had  fallen  out  of  favour  with  the 
ruling  coterie.  Thus,  a  series  of  stories  condemnatory 
of  Smt.  Nandini  Satpathy  were  broadcast  just  before 
President's  Rule  w,as  imposed  in  Orissa. 

6.90  The  slant  against  the  opposition  was  so  obvious 
;that  in  December,  1976,  AIR  bulletins  devoted  2207 
lines  to  the  spokesmen  of  the  Congress  Party  as  against 
34  lines  to  the  opposition.  In  December,  1974,  the 
same  figures  were  571  and  522  respectively.  Accord- 
ing to  Shri  Shukla,  most  of  the  spokesmen  of  the  Con- 
gress Party  were  Ministers  and  hence  there  was  nothing 
wrong  in  publicising  their  views  on  matters  concerning 
the  Government. 

•  6.91  According  to  Shri  Bhatt,  during  the  election 
campaign,  the  All  India  Radio  distorted  news  in 
favour  of  the  Government  and  the  ratio  of  news 
between  the.  Government  and  the  opposition  parties 
went  up  to  as  much  as  8.5  :  1.  The  Minister  was 
frequently  giving  instructions  regarding  the  type  and 
scope  of  the  news  which  should  be  carried.  The  All 
India  Radio  News  was  subjected  to  approval  by  the 
Secretary  Shri  Burney  and  the  Additional  Secretary 
Shri  Prasad  before  it  was  put  out  on  the  air. 

6.92  This  came  about  because  Smt.  Indira  Gandhi 
had  sent  for  Shri  Burney  and  complained  to  him 
that  the  Ministry  of  Information  and  Broadcasting  was 
not  managing  the  press  well  and  that  AIR/TV  were 
also  not  functioning  properly.  After  receiving  these 
comments  of  the  Prime  Minister,  Shri  Burney  directed 
that  news  bulletins  would  be  cleared  by  him  or  Shri 
K.    N.    Prasad. 

6.93  According  to  Shri  Shukla  it  was  at  his  instance 
that  instructions  were  issued  to  Shri  Burney  that  moni- 
toring, of  AIR  news  should  be  done  by  him  or  by 
Shri  Prasad  as  Shri  Shukla  had  received  some  com- 
plaints that  the  coverage,  in  news  bulletins  of  AIR  was 
not  appropriate  to  Government. 

Sm  HA/77— 7 


6.94  Shri  Shukla  also  admitted  to  having  talked 
to  the  Director  General  of  All  India  Radio  to  give  him 
the  story  regarding  the  alleged  attack  on  Shri  Sanjay 
Gandhi  at  Amethi  on  March  14-15,  1977.  Shri 
Shukla  also  issued  directions  that  reactions  of  impor- 
tant Congress  leaders  to  the  attack  on  Shri  Sanjay 
Gandhi  should  be  obtained  and  broadcast  the  follow- 
ing morning.  Shri  Siiukla  further  stated  that  he  had 
instructed  his  staff  members  at  Raipur  to  indicate  to 
AIR  that  the  news  regarding  the  alleged  attack  on 
Shri  Purshotam  Lal  Kaushik,  the  rival  candidate  at 
Raipur  may  not  be  reported  as  other  instances  of  poll 
violence  were  not  reported. 

6.95  One  hundred  forty  new  posts  of  part-time 
Correspondents  had  been  created  in  the  AIR  in  March, 
1976.  As  a  rule  in  the  past,  part-time  Correspondents 
were  appointed  from  amongst  those  already  serving  in 
a  newspaper  and  the  appointment  was  made  by  the 
Director  News  Services.  For  filling  up  these  new  posts 
the  method  and  criteria  for  appointment  were  changed 
on  April  23,  1976.  The  appointment  was  vested  in  a 
committee  consisting  of  Joint  Secretary  (Information) 
and  Joint  Secretary  (Broadcasting)  of  the  Ministry 
and  the  informal  approval  of  the  Minister  had  to  be 
obtained  before  the  appointments  could  be  made. 

6.96  After  the  change  of  criteria  three  part-time 
Correspondents  were  appointed  to  AIR,  all  of  whom 
ivere  office  bearers  of  the  Congress  party.  Shri  Shukla 
said  that  he  did  appoint  these  people  its  part-time 
Correspondents  even  though  his  staff  had  told  him 
about  their  political  backgrounds,  but  he  said  that  it 
would  be  unwarranted  to  say  that  these  people  were 
appointed  because  they  were  members  of  the  Congress 
Party.  He  said  that  as  a  matter  of  policy  the  bar  ori 
members  of  political  parties  being  appointed  was  re- 
moved, and  if  a  person  was  otherwise  suitable  he 
could  be  appointed.  He,  however,  could  not  recall 
any  instance  of  a  person  belonging  to  another  political 
party  being  appointed  to  this  post. 

6.97  Shri  G.  L.  Vohra  had  been  working  as  All 
India  Radio's  part-time  Correspondent  at  Raipur  from 
October  1,  1963.  According  to  Shri  S.  C  Bhatt,  his 
performance  was  generally  considered  satisfactory  and 
hi?  contract  was  renewed  from  time  to  time.  On  March 
19,  1977,  the  Special  Assistant  to  the  Minister  for 
Information  and  Broadcasting,  Shri  V.  S.  Tripathi 
spoke  to  Shri  Bhatt  and  told  him  that  the  Minister 
had  desired  that  Shri  Vohra's  services  should  be  termi- 
nated forthwith.  Shri  Bhatt  also  said  that  Shri  Tripathi 
had  told  him  that  Shri  Vohra  had  covered  Smt.  Viiaya- 
lakshami  Pandit's  election  speech  at  Raipur  on  March 
17  for  the  AIR  regional  bulletin.  Shri  Bhatt  told  Shri 
Tripathi  that  AIR's  story  was  based  on  Samachar  report 
and  not  on  Shri  Vohra's  coverage  but  Shri  Tripathi 
said  that  the  Minister's  orders  had  to  be  carried  nut. 
Shri  Tripathi  confirmed  that  he  had  received  instruction 
from  the  Minister  for  terminating  Shri  Vohra's  services 
but  he  said  that  he  did  not  know  why  Shri  Vohra's 
services  were  terminated  and  he  in  fact  said  that  it 
would  be  wrong  to  suggest  that  his  services  were  termi- 
nated because  he  had  covered  the  speech  of  Smt. 
Vijayalakshmi   Pandit.      He   further  said   that  he  had 


4$ 


spoken  about  the  coverage  of  §mt,  Vijayalakshmi 
Pandit  because  he  was  told  by  the  Private  Secretary 
to  Minister,  who  was  at  Raipur  that  he  should  obtain 
the  details  from  Shri  Bhatt  about  the  coverage  given  to 
Smt.  Vijayalakshmi  Pandit's  public  meeting  at  Raipur., 
He  said  that  he  had  ascertained  from  the  Minister  as  to 
why  Shri  Vohra's  services  had  been  dispensed  with 
and  Minister  had  told  him  that  it  had  been  decided  to 
appoint  a  full-time  Correspondent  at  Raipur  instead  of 
a  part-time  Correspondent. 

6.98  Shri  V,  C.  Shukla  said  that  after  the  elections 
were  announced  and  he  had  gone  to  Raipur  various 
reports  and,  complaints  started  coming  in  and  he  had 
mentioned  these  to  Shri  Tripathi,  who  knew  Shri 
Vohra.  Further  a  decision  had  already  been  taken  that 
Raipur  All  India  Radio  should  have  a  staff  correspon- 
dent rather  than  a  stringer  and  this  decision  had  been 
taken  much  before  the  elections.  Therefore,  when 
during  the  election  campaign  reports  regarding  Shri 
Vohra  had  reached  him,  he  had  decided  that  no  action 
should  be  taken  to  remove  Shri  Vohra  during  the  elec- 
tion campaign  lest  it  may  be  misunderstood  that  it  was 
done  for  some  reasons  connected  with  elections.  There- 
fore, he  told  Shri  Tripathi  after  the  polling  in  his  consti- 
tuency (Raipur)  to  instruct  Shri  Bhatt  to  remove  Shri 
Vohra  as  All  India  Radio's  part-time  Correspondent 
at  Raipur.  Shri  Shukla  further  stated  that  though  the 
Janata  Party  Government  had  restored  Shri  Vohra  and 
gave  to  him  the  post  of  part-time  Correspondent,  soon 
after  this  they  again  removed  him  and  posted,  in  accor- 
dance with  the  decision  taken  earlier,  a  staff  correspon- 
dent of  All  India  Radio  at  Raipur  and  that  Shri  Vohra 
may  have  been  reinstated  at  the  most  for  a  month  or 
two.  He  said  that  Shri  Vohra's  coverage  of  Smt. 
Vijayalakshmi  Pandit's  meeting  was  quite  fair  and  no 
exception  could  be  taken  to  that  coverage. 


3.  Doordarslian 

6.99  The  coverage  of  Shri  Sanjay  Gandhi  by  Door- 
darshan  went  up  after  December,  1975.  In  all,  a  sum 

;of  Rs.  8,33,055  was  incurred  during  the  period  of 
"Emergency  on  coverage  of  Shri  Sanjay  Gandhi.  Shri 
Shukla  justified  the  extraordinary  publicity  given  to 
Shri  Sanjay  Gandhi  on  the  ground  that  at  that  time 
even  private  media  were  paying  considerable  attention 
to  the  doings  of  Shri  Sanjay  Gandhi. 

6.100  As  regards  the  coverage  of  the  Prime  Minis- 
ter, both  over  AIR  and  Doordarshan.  Shri  Shukla 
stated  that  it  was  the  normal  function  of  the  Govern- 
ment Media  Departments  to' cover  the  activities  of  the 
Government  and  its  leader,  the  Prime  Minister. 


4.  Films  Division 

6.101  A  number  of  films  were  produced  by  the 
Films  Division  to  project  the  image  of  Shri  Sanjay 
Gandhi  not  onlv  as  a  Youth  leader  but  as  a  leader  in 
his  own  r'ght.  The  decision  to  nroduce  fh^s^  films  was 
taken  at  meetings  presided  over  by  Shri  S.  M.  H.  Burney 
at  which  was  present  Shri  Navin  Chawia,  Secretary  to 
the  Lt.  Governor  of  Delhi. 


6.102  According  to  Shri.  K.  K.  Kapil,  Joint  Chief 
Producer  of  Fums  Division,  it  was  Shri  S.  M,  H. 
Burney  who  had  directed  him  to  produce  these  films  so 
that  the  personality  of  Shri  Sanjay  Gandhi  could  be 
brought  out  in  an  oblique  and  subtle  manner  and  that 
he  should  get  in  touch  with  Shri  Navin  Chawia,  who 
was  virtually  nominated  as  consultant  for  these  films. 

6.103  According  to  Shri  Navin  Chawia,  he  had!  play- 
ed a  role  in  production  of  these  films  at  the  instance 
of  the  Lt.  Governor  of  Delhi,  who  had  spoken  to 
Shri  S.  M.  H.  Burney  for  preparation  of  publicity' films 
for  the  Delhi  Administration.  Shri  Burney  had  then 
formed  a  working  group  for  this  matter..  Shri  Chawia 
participated  in  this  as  a  representative  of  the  Lt.  Gov- 
ernor, Shri  Navin  Chawia  said  that  he  used  to  see  the 
films  and  clear  them  at  the  instance  of  Shri  Burney. 
He  denied  that  he  ever  directed  anyone  to  project  Shri 
Sanjay  Gandhi  as  the  main  personality  in  these  films 
or  as  a  hero  of  the  projects  depicted  in  these  films.  On 
a  suggestion  from  Shri  Kapil  in  a  casual  conversation 
he  had  agreed  with  him  that  films  on  Shri  Sanjay 
Gandhi  should  be  preserved  and  they  should  not.be 
wasted.  He  recollected  that  this  matter  was  taken  up 
in  the  group  meeting. 

5,  Directorate  of  Field  Publicity  and  the  Song  and 
Drama  Division. 

6.104  The  other  Government  media  i.e.  Directorate 
of  Field  Publicity,  Song  and  Drama  Division,  were  also 
asked  to  project  the  image  of  Smt.  Gandhi  and  the 
Congress  parly  as  testified  to  by  Dr.  A.  R.  Baji,  Direc- 
tor of  Field  Publicity  and  Shri  Birendra  Narayan, 
Director,  Song  and  Drama  Division.  Dr.  Baji,  who  was 
earlier  the  Prncipal  Information  Officer  had  also  been 
directed  by  Shri  Shukla  to  contact  the  Editor  of  the 
'Statesman'  newspaper  and  asked  him  to  give  full 
publicity  both  photowise  and  newswise  to  Smt,  Gandhi 
and  to  Shri  D.  K.  Barooah,  the  then  Congress  Presi- 
dent. According  to  Shri  Shukla,  it  was  the  normal  fu'nc- ' 
tion  of  the  Principal  Information  Officer  to  project  the 
image  of  the  leader  of  the  Government  and  he  did  not 
see  anything  wrong  in  it.  ' 

6.  Multi-media  Campaigns 

6.105  A  number  of  multi-media  campaigns  were 
launched  during  the  Emergency  to  coincide  with  im- 
portant milestones  in  Smt.  Gandhi's  career.  The  most 
important  were  the  "Decade  of  Achievement"  and  "The; 
Year  of  Fulfilment",  The  former  was  organised  when 
Smt.  Gandhi  had  completed  ten  years  in  power  as 
Prime  Mnister.  Various  Government  media  depart- 
ments were  given  detailed  instructions  on  how  this  was 
to  be  publicised.  Thus,  Directorate  of  Field  Publicity 
was  to  screen  extensively  the  seven  films  that  it  had' 
on  the  Prime  Minister,  and  also  to  obtain  in  sufficient 
numbers  the  taoes  of  Smt.  Gandhi's  broadcast  of 
November  11,  1975  for  extensive  publicity  in  semi- 
urban  and  rural  areas.  The  Films  Division  also  prepar- 
ed a  film,  "A  Day  with  fh*i  Prime  Minister".  The  ATR 
was  directed  to  select  200  quotations  from  Smt. 
Gandhi's  speeches  and  to  put  but  five  to  ten  of  these 
quotations  daily  on  the  air.   The  Publications  Division 


tt-x~ 


"■■-^.--J^Vfe^i^Ss^*'.^..  ^ '-:■■'  ■^^^;-=:J;^:.>  ,'j'   ;-  ■/l.  . ....  :/:.-;,  ^   ^vV-'-'^^^^'^i.^^^^^^.^-. 


47 


was  directed  to  boost  the  sales  of  Smt,  Gandiii's  books 
add  to  publish  informative  and  interesting  sketches 
with  photograph  of  Smt.  Gandhi  in  various  journals 

and  periodicals. 

6.106  According  to  Shri  K.  N.  Prasad  the  emphasis 
was  not  to  justify  the  emergency  but  on  the  gains  of 
the  emergency.  He  also  said  that  he  was  never  in  touch 
with  the  All  India  Congress  Committee  or  Shri  Yashpal 
Kapoor  on  this  subject,  but  that  at  one  of  the  meetings 
held  in  Shri  Dhararn  Vir  Sinha,  Deputy  Minister's 
house  on  the  'Decade  of  Achievement'  he  found  Shri 
Yashpal  Kapoor  there  who  gave  out  a  complete  pro- 
gramme of  what  the  Congress  Party  was  doing.  Shri 
Prasad  took  it  and  kept  it  on  the  file  but  he  never  got 
in  touch  with  Shri  Kapoor  or  anybody  in  the  Congress 
Party  to  coordinate  or  do  anything. 

6.107  Shri  Shukla  denied  that  these  compaigns  were 
organised  to  build  Up  the  image  of  Smt.  Gandhi.  He 
said  that  these  were  organised  to  build  up  and  project 
the  image  of  the  Government  and  those  who  were  fun- 
ctioning within  the  Government  and  nothing  in  this 
was  done  "to  project  the  image  of  throw  up  the  ; 
image  of  anybody  who  was  not  functioning  within  the 
Government". 

6.1  OS  During  the  election  campaign  another  multi- 
media publicity  campaign  was  launched  entitled  "The 
Campaign  1977,  the  Content  Strategy".  According  to 
Dr.  N.  Bhaskar  Rao,  a  consultant  to  the  Ministry  of 
Information  and  Broadcasting,  on  the  evening  of  Jan- 
uary 19,  1977,  Shri  Hit  Prakash,  Joint  Secretary  in 
the  Ministry  of  Information  and  Broadcasting  had  asked 
him  to  prepare  a  note  on  the  basis  of  instructions  that 
he  had  received .  from  the  Secretary  on  the  election 
campaign.  Dr.  Bhaskar  Rao  met  Shri  S.  M.  H.  Barney 
the  next  day,  i.e.,  January  20,  1977.  Shri  Burney  in 
addition  to  what  Shri  Hit  Prakash  had  suggested  wan- 
ted Dr.  Bhaskar  Rao  to  identify  the  areas  where  the 
then  Opposition  parties  were  having  a  strong .  holds 
and  to  suggest  methods  for  intensifying  campaign  in 
those  areas.  Shri  Burney  himself  identified  some  areas 
and  he  also  wanted  that  some  of  the  achievements  and 
qualities  of  Smt.  Indira  Gandhi  should  be  highlighted 
in  his  campaign.  He  further  directed  Dr.  Rao  to  pre- 
pare media-wise  activities  for  this  campaign.  Dr.  Rao 
accordingly  compiled  a  note  and  gave  copies  of  it  to 
Shri  Burney,  Shri  K.  N.  Prasad  and  Shri  Hit  Prakash 
on  January  21,  1977.  The  original  of  the  note  was 
identified  by  Dr.  Rao  during  the  Commission's  hearings. 
This  contained  a  list  of  30  specific  themes  associated 
with  Smt.  Gandhi  and  the  Emergency  which  would 


appeal  easily  to  the  people  and  publicised  the  achieve- 
ments of  the  Government,  He  also  gave  suggestions  tb 
counteract  likely/potential  arguments  of  the  Opposi- 
tion some  of  which  could  be  forestalled  while  others 
could  be  countered  as  and  when  they  became  issues. 
He  had  also  admitted  to  have  identified  towns  and  cities 
where  the  Opposition  was  strong  but  suggested  that 
this  could  be  further  narrowed  down  by  local  field 
units  after  consulting  the  other  wings  of  the  Govern- 
ment and  party  leadership.  He  had  also  suggested  that 
responsible  persons  in  the  Ministry  should  monitor 
the  various  kinds  of  campaign  issues  raised  by  the 
Opposition  so  that  corrective  measures  could  be 
taken. 

6.109  Dr.  Bhaskar  Rao  has  further  stated  that  a  few 
days  after  this  note  was  prepared  Shri  Hit  Prakash  met 
him  in  Shri  Gopalakrishnan,  Director  (IP),  I&B  Minis- 
try's room  and  told  him  that  the  earlier  note  needed 
revision.  Shri  Hit  Prakash  told  him  that  as  the  note 
had  been  specifically  mentioned  in  the  minutes  and 
could  not  be  withdrawn  altogether  another  had  to  be 
substituted  for  it.  Subsequently,  Dr.  Rao  prepared  an- 
other note.  Dr.  Rao  admitted  to  the  Commission  that 
he  had  realised  that  there  was  a  complete  identity 
established  in  his  report  between  the  Government  and 
the  party  but  he  had  done  it  under  the  impression  that 
he  had  been  merely  asked  to  give  some  points  for  the 
meeting  and  that  this  note  would  not  be  distributed. 

6.1 10  Shri  Gopalakrishnan  told  the  Commission  that 
when  he  read  Dr.  Rao's  note  he  felt  that  it  was  not  a 
proper  note  to  be  issued  and  he  had  gone  to  Shri  Hit 
Prakash  and  told  him  that  the  note  should  be  with- 
drawn. Shri  Hit  Prakash  had  agreed  with  him  and  after 
a  word  with  Shri  Burney,  Dr.  Rao  was  asked  to  revise 
his  original  note.  Shri  Gopalakrishnan  agreed  that  even 
in  the  amended  note  there  were  certain  facts  like  the 
percentage  of  polling  by  the  various  parties  which  was 
not.  strictly  warranted  in  an  official  document. 

6.111  Shri  Burney  denied  that  he  had  ever,  asked 
Dr.  Rao  to  prepare  any  paper  and  he  was  not  aware  if 
anybody  in  the  Ministry  had  asked  him  to  do  so.  He 
said  that  this  paper  was  prepared  voluntarily  by  Dr. 
Rao.  He  said  that  Dr.  Rao  was  a  Consultant  to  the 
Ministry  and  that  he  used  to  prepare  a  number  of 
such  papers  evaluating  the  performance  of  Govern- 
ment Media  Units  and  he  thought  that  Dr.  Rao  had 
prepared  a  paper  for  reorienting  publicity  in  the  wake 
of  the  Chief  Ministers'  Conference  where  it  was  decided 
that  20  plus  5  point  Programme  should  be  highlighted. 
Shri  Burney  admitted  that  the  paper  was  under  circula- 
tion for  a  day  or  two  before  it  was  substituted. 


ktjShott^c;.  ;:■;  j:  ■  JSKfc  ir  ^^:T-:^:>v/i'ii^:&^ 


ta&ii'&i  '■'-''  i-f.v 


CHAPTER  VII 


1.  The  case  regarding  the  reversion  of  Shri  Justice 
Aggarwal  of  Delhi  High  Court  : 

'7.1  Shri  R.   N.   Aggarwal,  who  belonged  to   the 

Higher  Judicial  Service  of  the  Union  Territory  of 
Delhi,,  was  promoted  in  1972  to  the  High  Court  of 
Delhi  and  was  appointed  as  ati  Additional  Judge  of 
the  High  Court.  The  term  of  Shri  R.  N.  Aggarwal 
was  extended  for  another  two  years  from  1974,  also 
as  an  Additional  Judge.  On  August  13,  1975,  there 
occurred  a  vacancy  on  the  retirement  of  Shri  Justice 
Jagjit  Singh  in  the  High  Court.  Normally,  Shri  R.  N. 
Aggarwal  who  was  the  senionnost  Additional  Judge, 
would  have  been  appointed  to  fill  that  post  which 
had  fallen  vacant.  The  Chief  Justice  of  the  High 
Court  recommended  Shri  R.  N.  Aggarwal  for  appoint- 
ment as  a  permanent  Judge.  On  September  22,  1975, 
he  recommended  that  Shri  Aggarwal  was  an  "asset  to 
the  High  Court".  The  Deputy  Secretary  prepared  a 
note  on  September  27,  1975,  which  was  submitted  to 
■  the  Secretary,  Department  of  Justice  and  the  approval 
of  the  Chief  Justice  of  India  to  the  appointment  of 
Shri  R.  N.  Aggarwal  as  a  permanent  Judge  was  ob- 
tained on  October  27,  1975. '  On  January  3,  1976,  the 
Minister  of  Law,  Justice  and  Company  Affairs  directed 
that  the  appointment  of  Shri  Aggarwal  as  a  permanent 
Judge  be  processed.  That  implied  his  approval  to 
the  recommendation. 


7.2  Shri  Aggarwal  was  not  appointed  a  permanent 
Judge  of  the  High  Court  and  he  had  to  revert  as  a 
Sessions   Judge. 


7.3  What  transpired  between  the  period  January  3, 
1976  nrid  January  12,  1976  is  not  evident  from  the 
file.  'It  appears  that  on  November  3,  1975,  Shri  P.  P. 
Nayyar,  a  Joint  Secretary  in  fits  Department  of  Justice 
had  sent  a  note  stating  that  Shri  Justice  R.  N.  Agganvar 
was  one  of  the  Judges  on  the  "MTSA  Bench"  of  the 
Delhi  High  Court.  On  this  note  Shri  Khurana,  Secre- 
tary, Department. _of  Justice,  noted  on  November  4, 
1975'  that  the  matter  should  be  discussed  as  to  when 
the  Judgment  in  Shri  Kuldip  Nayar's  case  was  announ- 
ced.. On  December  4,  1975,  the  Joint  Secretary  noted 
that  the  judgment  was  delivered  "on  15:7-75".  He 
also  noted  that  the  Law  Minister  wanted  the  case  to 
be  processed  early  and  the  file  to  be  put  up  to  him. 
The  file  was,  accordingly,  re-submitted.  Later,  it 
appears  that  there  was  some  discussion  between  Shri 
Gokhale,  the  Law  Minister,  and  the  Secretary,  Depart- 
ment of  Justice,  when  pursuant  to  that  it  was  recorded 
on  January  3,  1976  t'hat  the  Law  Minister  desired 
that  the  appointment  of  Shri  R.  N.  Aggarwal  as  a 
permanent  Judge  be  processed. 

7.4  Thereafter  at  the  request  of  Shri.  Khurana, 
Secretary,  Department  of  Justice,  inquiries  were  made 
by  the  Intelligence  Bureau  concerning  Shri  Aggarwal. 


S/39  HA/77— 8 


Shri  S.  N.  Mathur,  Director,  Intelligence  Bureau,  re- 
ported on  January  12,  1976  that  Shri  R.  N.  Aggarwal 
belonged  to  Judicial  Service  of  Delhi  and  was  closely 
associated  with  R.S.S.  in  1950s  and  early  1960s.  It 
was  also  mentioned  in  the  report  that  he  used  to 
attend  Shakhas  of  R.S.S.,  in  the  Naya  Bazar  area  of 
Delhi  and  that  he  had  stopped  taking  part  in  the 
activities  of  the  R.S.S. ,  in  the  early  1960s  after  the 
Government  issued  orders  prohibiting  the  Government 
servants  from  participating  in  such  activities.  It  would 
also  appear  from  the  report  of  the  Intelligence  Bureau 
that  there  were  also  other  grounds  raised  against  Shri 
Aggarwal,  but  no  further  details  were  set  out.  There- 
after on  January  14,  1976,  Shri  Khurana  recorded 
that  the  report  received  from  the  Director  of  Intelli- 
gence Bureau  may  be  taken  into  /consideration  in  mak- 
ing the  recommendation  to  the 'Prime  Minister.  Shri 
Gokhale  prepared  a  note  which  is  on  the  file  but 
undated,  challenging  the  correctness  of  the  association 
of  Shri  Aggarwal  with  the  R.S.S.,  for  the  related  period 
as  Shri  Aggarwal  was  not  in  fact  in  Delhi  in  the 
1950s  and  early  1960s  and  further  stated  that  nothing 
was  brought  to  his  notice  with  regard  to  any  specific 
matter  which  may  render  him  unfit  to  be  appointed. 

7.5  Shri  Gokhale  has  stated  before  the  Commission 
that  the  allegations  against  Shri  Aggarwal  "were  not 
correct  and  I  did  it  on  the  basis  of  facts  which  I  had 
meanwhile  collected  on  my  cwn,  and  had  seen  that 
this  report  was  not  correct  and  what  was  alleged  there 
was  not  substantiated.     Even  the  general  allegations 

about  Mr.   Justice  Aggarwal.  are not correct. 

That  is  the  note  which  I  prepared  and  I  had  hand- 
ed it  over  personally  to  the  Prime  Minister.  According 
to  me  it  was  demonstrably  wrong  and  then  she  said,  "I 
will  ask  the  Home  Ministry",  and  perhaps  she  did. 
I  do  not  know  whom  she  asked.  "T  saw  her  after 

some  days  ngnin She  said  that  she  was  told  that 

the  .report  was  correct.  The  report .  which  I  had 
contested  was  correct  and  she  had  given  me  to  under- 
stand" that  il  was  not  intended  to  confirm  Mr.  Justice 
Aggarwal.  Now  after  this  happened  I  made  a  note 
",  Apparently,  thereafter  the  papers  were  sub- 
mitted to  the  Prime  Minister  by  Shri  Gokhale,  the 
Law  Minister,  on  February  20,  1976  not  recommend- 
ing confirmation/extension  to  Justice  R.  N.  Aggarwal 
and  this  was  approved  by  Smt.  Indira  Gandhi  on 
February  24,  1976. 

7.6  Shri  Aggarwal  in  not  being  confirmed  had  to 
revert  as  a  Sessions  Judge  in  the  Delhi  Administration. 

7.7  In  the  course  of  his  examination,  the  Director 
of  the  Intelligence  Bureau  has  disclosed  that  there  were 
some  further  inquiries  made  and  some  information  was 
collected.  Whether  that  information  was  submitted  to 
the  Prime  Minister  or  the  Government  does  not  appear 
from  the  record.  But  Shri  Gokhale  has  stated  that 
he  had  prepared  a  note  which  was  submitted  to  the 


49 


so 


Prime  Minister  recommending  the  appointment  of  Shri 
Aggarwal ;  but  that  the  Prime  Minister  declined  to 
accept  the  recommendation. 

7.8  On  a  review  of  the  files  of  the  Government  and 
considered  in  the  light  of  the  evidence,  it  appears  that. 
Shri  R.  N.  Aggarwal,  who  was  regarded  by  the  Chief 
Justice  as  an  asset  to  the  High-  Court  and  who  had 
functioned  as  a  Judge  for  nearly  four  years,  was  asked 
to  revert  to  his  original  position  as  a  Sessions  Judge. 

7.9  Smt.  Gandhi  has,  in  the  reply  which  she  gave 
on  the  21st  of  November,  1977,  refused  tfte  request  to 
assist  the  Commission  in  the  proceedings  and'  stated 
that  the  Prime  Minister  was  the  "key-stone  of  the 
Constitution"  and  was  entitled  to  over-rule  the  recom- 
mendation of  a  Cabinet  colleague.  She  also  stated 
that  it  was  in  the  light  of  this  Constitutional  position 
that  her  decision  not  to  confirm  Shri  Justice  R.  N. 
Aggarwal  may  be  considered  by  the  Commission.  She 
further  stated  that  she  had  no  personal  acquaintance 
with  Shri  R.  N.  Aggarwal  nor  had  she  any  private 
information  and  that  her  decision  was  based  upon  an 
assessment  of  the  facts  placed  before  her  and  the 
conflicting'  recommendations  that  she  had  received 
from  the  Ministers  of  Law  and  Home  Affairs.  She 
invited  the  Commission  to  examine  official  sources  to 
determine  that  no  consideration  whatsoever  other  than 
those  of  public  interest,  adjudged  in  the  circumstances, 
were  involved  in  her  decision.  But  sfce  declined  to 
file  a  statement  on  oath  pursuant  to  a  notice  under 
rule  5(2) (a),  as  required  in  terms  of  rule  5(3). 

7.10  When  a  summons  was  issued  to  her  under  sec- 
tion 8B  of  the  Commissions  of  Inquiry  Act,  she  appear- 
ed before  the  Commission  but  declined  to  take  oath 
and  give  evidence  on  the  plea  that  she  was  not  legally 
and  Constitutionally  bound  to  give  such  evidence.  When 
requested  by  the  Commission  to  give  evidence,  she 
categorically  declined  to  do  so. 

7.11  The  question,  which  this  Commission  has  been 
called  upon  to  decide  is  whether  the  action  of  the 
former  Prime  Minister  Smt.  Indira  Gandhi  amounted 
to  an  abuse  of  authority  or  misuse  of  power.  As 
submitted  by  her  in  her  letter  dated  21st  of  November, 
1977,  s*he  had  no  personal  acquaintance  with  Shri 
Aggarwal  and  she  had  no  private  information  and  that 
no_  consideration  other  than  those  of  public  interest 
adjudged  in  the  circumstances,  were  involved  in  her 
decision.  There  was  the  evidence  of  the  report  of  the 
Chief  Justice  that  Shri  Aggarwal  was  an  asset  to  the 
High  Court  of  Delhi.  He  had  functioned  as  a  Judge 
for  four  years  in  the  High  Court  and  nothing  adverse 
had  come  to  the  notice  of  anybody  during  that  time. 
The  Minister  of  Law  and  Justice  had  apparently  agreed 
with  f*he  recommendation  of  the  Judge  of  the  High 
Court  and  the  Chief  Justice  of  India  that  Shri  Aggarwal 
should  be  appointed  to  the  office  of  a  permanent  Judge 
of  the  High  Court. 

7.12  It  is  true  that  for  adequate  reasons  it  may  be 
open  to  the  Prime  Minister  notwithstanding  the  recom- 
mendations so  made  to  overrule  the  recommendations 
and  decline  to  confirm  tfie  appointment  as  recommend- 
ed.    But  this  case  discloses  two  disturbing  facts  : — 

(a)    (i)   that  sometime  in  the  month  of  August, 
1975,  a  petition  for  a  writ  of  Habeas  Corpus' 


was  filed  by  one  Shri  Kuldip  Nayar,,  a  Jour- 
nalist. The  petition  was  heard  by  the  Delhi 
High  Court  by  a  Bench  ■  consisting  of  S. 
Rangarajan  and  R.  N.  Aggarwal,  JJ  and 
the  orders  of  the  Government  were  set  aside 
and  the  attitude  of  the  Government's  decision 
was  criticised,  especially  the  manner  in  which 
the  orders. were  passed. 

(ii)  Soon  thereafter  Shri  Justice  S.  Ran- 
garajan was  transferred  from  the  'Delhi  High 
Court  and  Shri  Justice  R.  N.  Aggarwal  was 
not  confirmed  in  a  clear  vacancy,  which  had 
occurred  in  the  High  Court  and  to  which,  in 
the  normal  course,  he  would  have  been 
appointed. 

(iii)  It  appears  that  in  Kuldip  Nayar's 
case  after  the  hearing  was  concluded,  the 
Government  finding  its  position  in  regard  to 
the  merits  of  the  orders  passed  against  Shri 
Kuldip  Nayar  unsustainable,  intimated  to" 
the  court  that  the  orders  against  Shri 
Kuldip  Nayar  were  withdrawn  and  he  had 
been  ordered  to  be  released.  It  was,  there- 
fore, expected  by  the  Government  that  since 
"the  Government  have  already  revoked  the 
detention  order  of  the  detenue  and  as  such 
decision  in  the  Habeas  Corpus  had  become 
infructuous".  However,  the  court  proceed- 
ed to  deliver  its  judgment  and  criticised  the 
conduct  of  the  Government.  There  can  be 
no  doubt  that  the  procedure  foliowed  by  the 
Bench  was  correct.  Because  a  party  "to  a 
dispute,  after  arguing  on  the  merits  of  the 
case,  when  faced  with  the  prospect  of  an 
adverse  decision,  would  not  be  permitted  t6 
amend  the  order  or  to  withdraw  the  order 
to  forestall  the  decision  by  seeking  to  with- 
draw the  action  taken  by  it  or  the  orders 
made  by   it. 

b)  (i)  Though  inquiries  must  have  been  made 
with  regard  to  the  antecedents  of  Shri  Justice 
R.  N.  Aggarwal  when  he  was  to  be  appoint- 
ed as  Judge  Of  the  High  Court  and  when  he 
had  continued  as  an  Additional  Judge  for 
about  four  years,  nothing  adverse  is  available 
on  record  of  the  Government.  Thereafter 
for  the  mere  reason  which  is  not  very  clearly 
disclosed  on  Hie  file,  when  a  recommendation 
for  the  appointment  of  Shri  Justice  Aggarwal 
as  a  permanent  Judge  was  received  from  the 
High  Court  of  Delhi,  Shri  P.  p.  Nayvar, 
.  Joint  Secretary  in  the  Department  of  Justice, 
invited  the  attention  of  the  superior  officers 
that  Shri  Justice  R.  N.  Aggarwal  was  one  of 
the  two  Judges  in  the  "MISA  Bench"  of  the 
High  Court  of  Delhi,  apparently  intending 
to  invite  the  attention  that  he  had  partici- 
pated in  delivering  the  judgment  in  Kuldip 
Nayar's  case.  The  information  was  obtained 
and  was  placed  on  the  file. 

(ii)  In  the  meantime,  it  appears  that 
a  report  was  obtained  from  the  Director  of 
Intelligence  Bureau  with  regard  to  Shri 
Aggarwal,    The  circumstances  in  which  this 


'-^''-V^^^i-S^-Tr^^ 


51 


.  ^  report  appears  to  have  been  received,  are 
not  clearly  apparent  from  the  record.     The 
.  Law  Minister,  before  whom  the  papers  were 
placed,   challenged   the   correctness   of  the 
association  of  Shri  Aggarwal  with  the  R.S.S., 
;   which  was  reported,  on  the  ground  that  the, 
:  report  could  not  be  true  because  Shri  Aggar- 
wal was  not  even  in  Delhi  at  the  time  when 
he  was  alleged  to  have  participated  in  the 
activities  of  R.S.S.  in  Delhi. 

(iii)  The  file  is  silent  for  the  period 

from  January  14,  to  February  20,  1976.  It 

'.    appears,   however,   from    the   circumstances 

mentioned  earlier  that  the  papers  had  been 

■  submitted  to  the  Prime  Minister  and  Shri 
:  Gokhale  had  discussed  the  case  with  her. 
■'  The  circumstances  do  tend  to  create  an  im- 

■  pression  that  because  of  the  participation  :of 
:  Shri  Aggarwal  in  the  hearing  and  disposal 
:   of  a  case  filed  by  Shri  Kuldip  Nayar,  the 

■  Government  was  put  in  an  awkward  posi- 
tion and  that  may  have  been  responsible  to 
some  extent  in  re-considering  whether  Shri 

•    Aggarwal  should  be  continued  as  a  Judge  of 

■  the  High  -Court.  -Thereafter,  a  report  was 
.  .obtained  from  the  Intelligence  Bureau  and 

the  papers  were  submitted  to  the  Prime 
;■  Minister.  The  Prime  Minister,  Smt.  Indira 
.   Gandhi,   though   has   asserted   through  her 

■  letter  dated  November  21,  1977  that  she 
;:  had  no  private  information  and  she  acted 

on  the  conflicting  reports  of  the  Home  Minis- 

■  try  and  the  Law  Ministry,  has  not  chosen 

■  to  file  a  statement  on  oath,  as  required  by 
•■-  ,  rule  5(3)   and  has  declined  to  come  into 

■■  the  witness  box  and 'to  take  an  oath  and 
;.  give  evidence  of  her  version,  when  requested 
.  by  the  Commission  and  has  declined  "also 
.  to  give  evidence  in  pursuance  of  the  sum- 
:   motts  issued  to  her  under  section  SB  of  the 

Act.  It  would,  therefore,  be  open  to  the 
,   Commission  to  draw  an  adverse  inference 

against  her. 

(iv)  On  the  one  side  there  was  the  evi- 
,   dence  of  the  persons  who  had  the  opportu- 
nity to  note  the  quality  of  his  work  and  be 

-  acquainted  with  him  in  the  discharge  of  his 
duties,  which  was  all  favourable  to  him,  Gn 

'.   the  other,  there  were  the  orders  of  the  Prime 

■:  Minister,  which,  she  says,  she  passed  declin- 
ing to  confirm  Shri  Aggarwal  in  the  post  of 

.    a  Permanent  Judge  in  exercise  of  her  autho- 

,  .,   rity  to  overrule  the  recommendation  made 

by  the  Law  Minister.   That  in  an  appropriate 

case  the  Prime  Minister  may  have  to  exer- 

i    cise  such  an  authority  is  not  a  matter  which 

;   is  relevant  to  this  case, 

(v)  The  question  falling  for  considera- 
tion is  whether  the  action  of  the  former  Prime 

■  Minister  amounted  to  abuse  of  authority  and 
misuse  of  power.    On  that,  part  of  the  case 

,    there  is  no  evidence  whatever  led  by  the 

-  Prime  Minister  in  support  of  her  version 
that  it  was  a  bona  fide  act  done  by  her  as 


a  Prime  Minister  in  the  interest  of  the  admi- 
nistration; whereas  the  evidence  disclosed 
on  the  file  and  the  oral  evidence  are  clearly 
indicative  of  the  fact  that  there  were  no 
circumstances  which  vjculd  have  come  in  the 
way  of  Shri  Aggarwal  being  appointed  as  a 
Permanent  Judge  of  the  High  Court. 

7.13  It  may  be  noticed  that  in  the  hierarchy  of 
courts  the  position  of  a  Judge  of  a  High  Court  is 
superior  to  that  of  a  Sessions  Court;  but  the  importance 
of  the  office  of  a  Sessions  Judge  cannot  on  that  account 
be  minimised.  The  Sessions  Judge,  who  also  occupies 
the  office  of  the  District  Judge,  exercises  unlimited 
jurisdiction  in  civil  matters  and  is  competent  to  impose 
all  sentences  including  a  sentence  even  of  death,  sub- 
ject, of  course,  to  confirmation  by  the  High  Court. 
If  for  any  reason  Shri  Aggarwal  was  thought  by  Smt. 
Gandhi  to  be  unfit  to  hold  the  office  of  a  Judge  of 
tiie  High  Court  that  would  have  been  equally  a  ground 
on  which  he  would  have  been  unlit  to  hold  the  high 
office  of  a  Sessions  Judge  in  the  Union  Territory  of 
Delhi.  But  Shri  Aggarwal  was  reverted  to  the  office 
of  the  Sessions  Judge  and  he  continued  to  hold  that 
office  till  he  was  again  elevated  to  the  High  Court  later 
in  the  year  1977.  That  is  a  ground,  which  clearly 
indicates  that  the  order  passed  against  Shri  Aggarwal 
was,  prima  facie,  in  the  nature  of  an  order  of  punish- 
ment for  participating  in  the  hearing  in  Kuldip  Nayar's 
case  and  passing  an  order  which  tarnished  the  image 
of  the  Government  in  the  public  eye. 

7.14  The  Commission  is,  therefore,  of  the  view  that 
a  case  of  misuse  of  authority  and  abuse  of  power  is 
disclosed  in  this  case,  against  Smt.  Gandhi. 

2.  Refusal  by  Smt,  Indira  Gandhi  to  extend  the  term 
of  Shri  Justice  V.  R.  Lalit  of  the  Bombay  High 
Court. 

7.15  Shri  U.  R.  Lalit,  an  Additional  Judge  of  the 
High  Court  of  Bombay,  was  recommended  for  exten- 
sion of  the  tenure  o£  his  office  by  the  Chief  Justice 
of  the  High  Court  of  Bombay.  The  recommendation 
was  accepted  by  the  Chief  Minister  of  Maharashtra, 
by  the  Governor  of  Maharashtra,  by  the  Chief  Justice 
of  India  and  by  the  Minister  for  Law,  Justice  and 
Company  Affairs  of  the  Government  of  India.  There 
were  no  adverse  reports  against  Shri  U.  R.  Lalit.  The 
then  Prime  Minister,  Smt.  Indira  Gandhi  declined  to 
agree  to  Shri  U.  R.  Lalit  continuing  as  a  Judge  of  the 
High  Court  of  Bombay.  Accordingly,  he  ceased  to 
be  a  Judge  on  January  17,  1976.  , 

7.16  Shri  H.  R.  Gokhale,  Minister  of  Law,  affirmed 
that  there  were  no  grounds  for  not  extending  the  term 
of  Shri  Lalit.  Shri  S.  L.  Khurana,  the  Secretary, 
Department  of  Justice,  was  also  examined.  From  the 
file  relating  to  Shri  Lalit  it  appears  that  the  Prime 
Minister's  Secretariat  returned  the  file  without  any 
endorsement.  Shri  Khurana  then  made  a  note  that 
it  was  not  intended  to  give  any  further  extension  to 
Shri  Lalit;  and,  therefore,  further  steps  should  be  taken 
to  examine  the  position  immediately. 

7J7  A  slip,  which"  was  a  part  of  the  file,  has  smce 
been  discovered  from  the  Prime  Minister's  Secretariat 


52 


by  the  officers  of  the  Commission.  A  note  is  made 
by  an  official  of  the  P.M.'s  Secretariat  stating  :  ' 

"Sometime  ago  a  proposal  of  the  Department  of 
Justice  to  continue  Justice  Lalit  as  an  Addi- 
tional Judge  of  the  Bombay  High  Court  was 
submitted  to  P.M.  Justice  Lalif's  present 
term  is  expiring  on  16-1-76  and  the  fresh 
appointment  has  to  be  made  before  that. 
Law  Minister  has  been  reminding  me  about 
this  case.  He  told  me.  that  he  had  spoken 
to  P.M.  also  about  this  case  a  few  days  ago." 

The  note  is  signed  by  Shri  B.  N.  Tandon,  the  then 
Joint  Secretary  to  the  Prime  Minister  and  is  dated 
12th   of   January,    1976. 

7.18  It  bears  a.  note  made  in  the  hand-writing  of 
the  Prime  Minister  : 

"I  do  not  approve  of  giving  him  anolher  term." 

The  word  'not'  has  been  underlined.  It  is  dated  Janu- 
ary 12,  1976,    On  that  Shri  Tandon  made  a  note  : 

"Secretary  may  kindly  see  for  information." 
and  thereafter  the  file  was  returned  to  the  Minister 
with   an   intimation   that   the 

"P.M.  has  spoken  to  him.". 

The  file  was,   accordingly,  returned. 

7.19  The  Commission  had  requested  Smt.  Gandhi 
to  appear  before  the  Commission  and  assist  the  Com- 
mission by  giving  information  relating  to  the  non- 
appointment  of  Shri  Lalit.  Through  her  letter  dated 
November  21,  1977,  Smt.  Indira  Gandhi  stated  that 
the  Prime  Minister  is  competent  to  overrule  the  recom- 
mendations of  a  Cabinet  colleague  and  that  in  the 
light  of  this  Constitutional  position,  the  decision  was 
taken  not  to  confirm  Shri  Justice  Lalit.  She  further 
stated  that  she  had  no  personal  acquaintance  with  the 
Judge  concerned  nor  any  private  information  and  her 
decision  was  made  upon  an  assessment  of  facts  placed 
before  her  and  the  conflicting  recommendations  that 
she  had  received  from  the  Ministers  of  Law  and  Home 
Affairs.  She  invited  the  Commission  to  examine  the 
official  records  and  determine  that  no  considerations 
whatever,  other  than  of  public  interest,  adjudged  in 
the  circumstances  were  involved  in  her  decisions. 

7.20  The  reply  filed  by  Smt.  Gandhi  was  not  as 
required  by  rule  5(3)  of  the  Commissions  of  Inquiry 
Rules.  She  has,  however,  clearly  stated  in  her  reply, 
which  is  not  on  oath,  that  she  had  no  private,  infor- 
mation except  what  was  contained  in  the  file.  But  the 
file  contained  no  material  which  was  adverse  to  Shri 
Lalit. 

7.21  Shri  Gokhale,  who  gave  his  testimony  on  oath, 
has  also  stated  that  there  was  nothing  against  Shri 
Lalit  and  that  it  was  only  because  Smt.  Gandhi  declin- 
ed to  confirm  his  appointment  for  another  term,  as 
Additional  Judge  that  he  was  constrained  not  to 
continue  Shri  Lalit  in  office. 


7.22  A  notice  was  issued  to  Smt.  Indira  Gandhi 
under  rule  5(2)  (a)   of  the  Commissions  of  Inquiry 
Rules  and  she  was  asked  to  file  her  statement.     In 
view  of  the  disclosures  made  by  Shri  Gokhale,  a  sum- 
mons was  also  issued  to  her  under  Section  SB-  of  the 
Commissions  of  Inquiry  Act,     She  remained  present 
in  the  Commission  Hall  but  declined  to  take  oath  and 
give  evidence  when  requested  by  the  Commission  to 
go  into  the  witness  box  to  enable  the  Commission  to 
ascertain  what  her  version  was.    In  the  circumstances, 
the  Commission  would  be  justified  in  drawing  adverse 
inference  having  regard  to  all  the  materials  placed 
before  the  Commission  that  this  was  a  clear  case  of 
abuse  of  authority  and  that  Smt.   Gandhi  arbitrarily 
declined  to  extend  the  term  of  Shri  U.  R.  Lalit-  as  an 
Additional  Judge  of  the  Bombay  High  Court:    It  may 
be  pointed  out  that  Shri  U.  R.  Lalit  was  an  Advocate 
practising  in  the  Bombay  High  Court  before  his  ap- 
pointment as  an  Additional  Judge.     Normally  when,  a. 
person  is  appointed  as  an  Additional  Judge  from  the 
Bar  it  is  expected  that  he  would  be  confirmed  as  a 
Judge  when  a  permanent  vacancy  arises.     It  appears 
further  that  there  had  been  hardly  any  case  in  which 
such  confirmation  had  not  been  made.     There-  were, 
no  materials  at  all  on  which  it  could  even  be  faintly 
suggested  that  Shri  U.  R,  Lalit,  who  had  functioned 
as  a  Judge  for  two  years,  was  unfit  to  continue  in 
office  as  a  Judge  of  the  High  Court. 

7.23  Shri  Justice  K.  N.  Wanchoo  had  made-  a  note 
on  the  29th  of  June,  1967  : — 

"When*a  Member  of  the  Bar  is  appointed  Addi- 
tional Judge  it  must,  be  with  a  view  to  make 
him  permanent  in  due  course.  If  that  is  not 
possible,  additional  judgeship  should  not  be 
offered  to  a  member  of  the  Bar.  I  agree,- 
therefore,  that  an  undertaking  should  be 
taken  from  members  of  the  Bar  that  they 
will  accept  a  permanent  judgeship  when 
offered  to  them  in  due  course.. ..." 

Refusal  to  extend  the  term  of  Shri  U.  R.  Lalit.  as  a 
Judge  of  the  High  Court,  therefore,  amounted  to!  sub- 
version of  well-established  conventions  and  practices 
and  amounted  to  abuse  of  authority  and  misuse  of 
power  by  Smt.  Indira  Gandhi. 

3.  Deviation  from  established  procedure  and  irregu- 
larities in  the  appointment  of  Shri  K.  R.  Puri  as 
Governor  of  the  Reserve  Bank  of  India. 

7.24  In  May,  1975,  Shri  N.  C.  Sen  Gupta  "was 
appointed  as  Governor  of  the  Reserve  Bank  of  India 
for  a  period  of  three  months  with  effect  from  May  19, 
1975.  His  term  was,  therefore,  to  end  on  August  18, 
1975.  This  short  term  appointment  was  made  to  give 
the  Government  time  to  identify  a  suitable  person  for 
the  post. 

7.25  Shri  C.  Subramaniam,  the  then  Finance  Minis- 
ter, sent  a  Top  Secret  note  to  Smt.  Indira' Gandhi,  then 
Prime  Minister,  on  29-7-1975  discussing  the  profes- 
sional, background  and  qualifications  essential  in  an 
individual  who  is  to  be  considered  for  appointment  to 
this  post.  He  said  in  this  note  that  in  assessing  the 
suitability  of  an  individual  one  has  to  keep  in  mind 


T       —     ~i  _r  iS.11-  ..      -  .        *■ ~  iiii;,iaaiiiStoto^to!iii^;ii,.-..iii^i^-.v 


the  functions  which  the  Governor  has  to  discharge 
and  the  leadership  that  he  has  to  provide  to  the  Reserve 
Bank,  which  is  the  Central  Bank  of  the  country.  He 
then  discussed  briefly  the  functions  and  responsibilities 
of  the  Reserve  Bank  and  its  Head,  the  Governor.. Tak- 
ing Into  account  the  particularly  difficult  monetary 
situation  then,  he  said  that  he  would  expect  the  Reserve 
Bank  to  be  the  main  guide  for  the  Government  in  the 
formulation  of  their  monetary  and  fiscal  policies. 

■  '7.26  In  the  light  of  these  exacting  requirements, 
Shri  Subramaniam  went  on  to  discuss  the  qualifications 
of  various  distinguished  Economists  and/or  Economic 
Administrators  like  Dr.  I  G.  Pate),  Mr.  Narayana 
Prasad,  Dr.  S.  R.  Sen  and  Shfi  M.  G.  Kaul,  as  possible 
incumbents  for  appointment  to  the  post  of  Governor, 
lie  also  referred  to  Shri  K.  R.  Pud,  the  then  Chairman 
of  the  Life  Insurance  Corporation  of  India.  This  is 
what  he  said  in  regard  to  Shri  Puri  :  — 

"P.M.  has  in  this  connection  mentioned  the  name 
of  Shri  K.  R.  Puri,  Chairman,  L.I.C.,  I  have 
examined  his  suitability  of  the  post  very 
carefully.  He  is  an  ordinary  graduate  and 
as  such  lacks  an  adequate  academic  back- 

;  ground.  He  has  been  in  the  field  of  insurance 
throughout  his  career  and  therefore  his  ex- 
perience has  been  in  a  very  limited  area  of 
specialisation,  unconnected  with  banking  and 
finance." 

Shri  Subramaniam  concluded  this  Top  Secret  note  by 
saying  that  Smt.  Gandhi,  if  she  so  wishes,  may  send 
for  -him  fc>r  discussion  so  that  an  early  decision  may 
be  taken.  The  original  of  this  note  could  not  be 
traced  in  the  Prime  Minister's  office. 

7.27'  Eventually  on  August  18,,  1975,  Shri  Subra- 
maniam recorded  the  following  order  on  the  relevant 
fileo'i  the  then  Department  of  Banking  : 

"Shri  K.  R.  Puri,  now  Chairman  LIC,  may  be 
appointed  as  Governor  of  Reserve  Bank  for 
a  period  of  one  year.     This  has  the'  con- 
currence of  the  Prime  Minister.    In  view  of 
die     fact     Shri  Sen  Gupta's     term     expires 
■■       tomorrow  orders  of  appointment  may  issue 
'  immediately   and  A.C.C.,   kept      informed. 
'   .  Shri  Puri  may  take  charge  tomorrow." 

The  A.C.C.  referred  to  above  is  the  Appointments 
Committee  of  the  Cabinet.  It  should  be  noted  at  this 
stage  that  under  the  relevant  Rules,  framed  for  the 
Transaction  of  the  Business  of  the  Government,  the 
appointment  of  the  Governor  of  the  Reserve  Bank 
required  the  approval  of  the  Appointments  Committee 
of  the  Cabinet. 

7.28  Pursuant  to  .Shri  -  ■■■Subramaniam's  order, 
extracted  above,  a  notification  was  issued  on  the 
18th  August,  1975  appointing  Shri  K.  R.  Puri  as 
Governor  of  the  Reserve  Bank  for  a  term  of  one  year 
with  effect  from  the  close  of  business  on  the  August 
19,   1975. 

7.29  Thereafter,  on  August  20,  1975,  Shri  M".  G. 
Balasubranianian.   the    then    Addl.    Secretary   in    the 


Department  of  Banking  wrote  to  Shri  U.  C.  Agarwal, 
Establishment  Officer  in  the  Department  of  Personnel 
and  Administrative  Reforms,  who  also  functions  as 
Secretary  to  the  Appointments  Committee  of  the 
Cabinet  mentioning,  inter  alia,  that  it  has  been  decided 
with  approval  of  Die  Prime  Minister  to  appoint  Shri 
K.  R.  Puri  as  the  Governor  of  the  Reserve  Bank  of 
India  for  a  period  of  one  year  with  effect  from  the 
close  of  business  on  August  19,  1975,  that  the  relevant 
Government  notification  has  already  been  issued  on 
the  August  IS,  1975  and  that  Shri  Aggarwal  may 
consider  "recording  the  information  suitably  in  the 
office  of  the  Appointments  Committee  of  the  Cabinet.'1* 

7.30  The  Appointments  Committee  of  the  Cabinet 
consisted  at  the  relevant  time  of  the  Prime  Minister, 
the  Home  Minister  and  the  Minister  concerned  in  the 
Ministry  or  the  Department  whose  proposal  is  being 
considered  by  the  Committee.  There  is  no  evidence 
in  the  relevant  papers  to  indicate  that  the  Home 
Minister  was  consulted  at  any  stage  before  Shri  K.  R. 
Puri's  appointment  as  Governor  of  the  Reserve 
Bank. 

7.31  It  is  seen  from  the  evidence  of  Shri  C.  Sub- 
ramaniam before  the  Commission  that  there  was 
disagreement  in  regard  to  the  choice  of  a  successor  to 
Shri  S.  Jagannathan  as  Governor  of  the  Reserve  Bank 
and  it  is  because  of  this  disagreement  that  the  interim 
appointment  of  Shri  Sen  Gupta  was  made.  Shri  Sub- 
ramaniam has  stated  further  that  even  at  that  stage 
Shri  Puri's  name  had  been  mentioned  to  him  and  that 
he  could  not  agree  with  that  suggestion.  In  response 
to  the  query  as  to  whether  he  Considered  Shri  Puri  lit 
to  hold  the  post  of  such  vast  importance  to  the  economy 
of  the  country,  Shri  Subramaniam  stated  that  "taking 
into  account  the  vast  fields  which  the  Reserve  Bank 
of  India  has  to  deal  with,  I  thought  Puri  was  not  the 
person  who  would  fit  in  this  job." 

7.32  It  would  be  relevant  at  this  stage  to  refer  to 
a  letter  dated  February  27,  1978  from  Shri  K.  R.  Puri 
addressed  to  the  Secretary  to  the  Commission,  "enclos- 
ing thereto  a  note  of  the  same  date  and  copies  of 
certain  Degree,  Certificates,  etc.  In  the  note  dated 
February  2,  1978  Shri  Puri  has  referred  to  .newspaper 
reports  of  the  evidence  tendered  before  the  Commis- 
sion by  Shri  C.  Subramaniam.  Evidence  was  tendered 
by  him  in  this  case  on  October  1,  1977  and  presum- 
ably reports  in  this  regard  must  have  appeared  in 
newspapers  on  the  next  day,  namely,  October  2,  1977. 
Shri  Puri  has  said,  inter  alia,  in  this  note  as  under  : — 

"Deposing  before  the  Commission,  Mr.  C. 
Subramaniam  has  given  the  main  reason  for 
not  considering  nre  lit  for  appointment  as 
Governor  of  the  Reserve  Bank  of  India  that 
I  was  an  ordinary  graduate  and  as  such  lack- 
ed adequate  background." 

7.33  Shri  Subramaniam's  statement  that  Shri  Puri 
is  an  ordinary  graduate  and  as  such  lacks  an  adequate 
academic  background  was  not  made  in  the  testimony 
before  the  Commission  but  made  a  note  submitted 
by  him  to  the  then- Prime  Minister  on  July  27,  1975, 
presumably  after  verifying  the  records  in  this  regard 
which  should  have  been  available  to  the     Finance 


54 


Minister.  It  is  seen  from  the  papers  since  submitted 
by  Shri  Puri  that  he  had  obtained  the  Degree  of 
Bachelor  of  Arts  with  Honours  in  English  in  the  exa- 
mination held  by  the  University  of  Punjab  in  the  year 
1939  and  that  he  was  placed  in  the  Second  Division. 
It  is  further  seen  that  he  had  also  obtained  the  Degree 
of  the  Bachelor  of  Laws  of  the  same  University  in  the 
anamination  held  in  May,  1943  arid  that  he  was  placed 
in  the  Second  Division.  Another  certificate  indicates 
that  he  was  successful  in  the  House  Examination  of 
the  F.E.L.  Class  held  in  December  1941  and  that  he 
stood  First  in  the  order  of  merit  in  the  subject  of 
Mercantile  Law,  U  is  not  clear  how  Shri  Subrama- 
niam's statement  that  Shri  K.  R.  Puri  is  an  ordinary 
graduate  can  be  considered  as  erroneous,  especially 
as  the  then  Finance  Minister  was  mentioning  it  in  the 
context  ot  the  specialised  knowledge  and  experience 
required  Eor  the  post  of  the  Governor  of  the  Reserve 
Bank,  which  he  had  briefly  indicated  in  the  earlier  part 
of  the  same  note. 

7.34  As  regards  Shri  C.  Subramaniam's  testimuny 
before  the  Commission,  insofar  as  it  related  to  Shri 
Puri's  academic  background  and  his  competence  in 
his  capacity  as  Chairman  of  L.I.C.,  1  cannot  do  better 
than  quote  verbatim  from  the  relevant  portion  of  the 
proceedings  ;- — 

-"Witness  :  As  a  matter  of  fact,  Mr.  Puri  was 
\.  ■  initially  in  my  Ministry  and  he  was  holding 
the  post  of  Chairman  and  Managing  Directoi 
of  the  L.I.C.  As  an  officer  in  the  L.I.C., 
no  doubt,  he  was  quite  competent!  But 
taking  into  account  the  vast  fields  which 
the  Reserve  Bank  of  India  has  to  deal  with, 
I  thought  Puri  was  not  the  person  who  would 
fit  in  to  this  job. 

Chairman  :  Did  he  have  any  academic  qualifica- 
tions which  might  have  otherwise  made  him 
suitable  ? 

Witness  :  1  had  made  it  quite  clear  in  my  memo 
to  the  Prime  Minister  that  apart  from  his 
academic  qualifications,  which  was  secondary, 
in  regard  to  his  experience,  particularly,  in 
the  national  sphere 

Chairman  :  You  mentioned  that  he  was  an 
ordinary  graduate. 

Witness :  That  is  true.    Even  an  ordinary  graduate 
may  acquire  experience  later  on.     Both  the 
»  thingshavc  to  be  taken  into  consideration, 

his  initial  academic  qualifications,  and  later 
on,  whether  he  had  acquired  any  expertise 
in  these  fields.  After  all,  this  is  the  starting 
point. 

Chairman  :  I  am  coming  to  that. 

Witness  :  Taking  both  the  things  into  considera- 
tion, I  was  definitely  of  the  opinion  that 
Mr.  Puri  may  not  be  fit  for  the  job." 

7.35  To  the  Commission's  query  as  to  why  he  still 
fell  in  line  with  the  suggestion  that  Shri  Puri  should  be 
appointed,  Shri  Subramaniam  replied  that  this  matter 


had  gone  on  dragging  for  three  months  and  that  he 
had  quite  a  number  of  discussions  with  the  .  Prime 
Minister  and  also  with  the  Secretary  to  the  Prime 
Minister.  In  response  to  the  query  as  to  whether  it 
means  that  the  Prime  Minister  was  insistent  that  Mr. 
Puri  alone  should  be  appointed,  Shri  Subramaniam 
replied — 

"She  said  that  Mr.  K.  R.  Puri  would  be  competent 
for  the  job  and  that  he  should  be  appointed." 

Shri  Subramaniam  also  stated  that  the  then  \  Prime 
Minister  had  told  him  that  as  Chairman  of  the  Life 
Insurance  Corporation  of  India,  Shri  Puri  had  to  deal 
with  "investments  and  various  other  things,"  ''But  in 
my  view  that  was  not  quite  relevant  because  the  Reserve 
Bank  of  India  deals  with  completely  different  problems 
of  financial  policy."  in  conclusion,  Shri  Subramaniam 
stated  as  under  : 

"Mr1,  Puri's  appointment  was  restricted  to  one 
year.  Generally  it  is  not  done.  It  is  live 
year  period.  I  think  it  was  because,  of  my 
objection  so  that  his  performance  ruay_  be 
watched.  So  the  period  was  restricted*  to 
one  year." 

7.36  Shri  Puri's  observation  in  his  note  dated 
February  27,  1 978,  referred  to  above,  that  on  _  the 
expiry  of  his  initial  one  year  term,  he  was  re-appointed 
in  January  1976  for  a  further  period  of  two  years  does 
not  affect  in  any  manner  Shri  Subramaniam's  statement 
regarding  his  initial  objections  to  the  proposal.  • 

7.37  Smt.  Gandhi  'has  not  filed  any  statement  in  this 
case  as  was  required  to  be  done  under  Rule  5(2)  (a) 
of  the  Commission  of  Inquiry  (Central)  Rules;  1972, 
she  had  responded  to  the  summons  u/s  8B  of  the  Act. 
But  she  refused  to  take  the  oath  and  tender  evidence. 
From  the  facts  on  record,  and  the  evidence  of  Shn 
C.  Subramaniam  in  this  case,  it  appears  that  *e  normal 
and  established  procedure  in  regard  to  the  appointment 
of  the  Governor  of  the  Reserve  Bank  of  India  was 
not  followed  and  that  the  then  Finance  Minister  Shri 
C.  Subramaniam  was  virtually  compelled  to  fall  in 
line  with  the  suggestion  made  by  the  then  '  Prime 
Minister  Smt.  Gandhi.'  This  was  yet  another  case  of 
subversion  of  established  administrative  procedure  and 
convention  by  Smt.  Indira  Gandhi  as  the  P.M. 

4,  Subversion  of  lawful  processes  and  well-established 
conventions  and  deviation  from  administrative  pro~ 
cedures  and  practices  in  the  appointment  of  Skri 
T.  R.  Varadachary  as  Cfiairman  of  the  State  Bank 
of  India. 

7:38  On  June  24,  1976,  the  then  Minister  of 
Revenue  and  Banking  Shri  Pranab  Mukherjee  sent  the 
following  secret  note  to  the  then  Prime  Minister  :. 

"Subject  :  Shri  R.  K.  Talwar,  Chairman,  State 
Bank  of  India—Term  of  appoint- 
ment. 


"Shri  R.  K.  Talwar  was  appointed  Chairman, 
State  Bank  of  India  with  effect  from  March 
1,  1969  for  a  term  of  5  years.  The'  term 
was  extended  by  a  further  period  of  3  years 
and  comes  to  an  end  on  February  28,  1977. 


mmmmmmmzmmmmm 


55 


Jt  has  been  the  Government's  intention  that 
his  term  of  appointment  should  be  curtailed 
and  he  be  asked  to  vacate  office.  As  the 
State  Bank  of  India  Act  provided  only  for 
removal  from"  office  which  could  be  only  as 
a  punishment,  the  State  Bank  of  India  Act 
.,  has  been  recently  amended  to  provide  for 

the  Government,  if  it  so  chooses,  to  termi- 
nate' the  term  by  giving  3  months'  notice  or 
3  months'  salary  and  allowances  in  lieu 
thereof.  Accordingly,  it  is  proposed  to  termi- 
nate, in  terms  of  Sub-section  (I A)  of  section 
20  of  the  Act,  the  term  of  appointment  of 
Shri  Talwar  as  at  the  close  of  business  on 
30th  June,  1976  and  pay  him  3  months' 
salary  and  allowances  in  lieu  of  notice. 

"In  the  vacancy  caused,  it  is  proposed  that  Shri 
'    ■  T.  R.  Varadachary  at  present     Managing 

Director,  State  Bank  of  India,  be  appointed 
as  Chairman  with  effect  from  1st  July,  1976 
till  February  28,  1977,  i.e.  till  such  time  as 
he  would  have  served  as  Managing  Director 
of  State  Bank  of  Itfdia. 

.   Sd/-  Pranab  Mukherjee, 

.     ;  Minister  of  Revenue  and  Banking 

Prime  Minister  of  India 


U.O.  No.   350(S)/MRB/76  dated   24-6-1.976" 

.  7.39  The  Secretary  to  the  Prime  Minister  endorsed 
on  the  note  on  July  21,  1976,  that  "PM  has  approved", 
and  returned  it  to  Shri  Pranab  Mukherjee.  Thereupon, 
Shri  Pranab  Mukherjee  recorded  a  note  order  on 
July  24,  1976  to  the  effect  that  the.  order  (appointing 
Shri  T.  R.  Varadachary  as  Chairman  of  the  State  Bank 
of  India)  may  be  effective  from  August  4.  1976. 
Pursuant  to  this  order,  the  Department  of  Banking 
issued  a  notification  dated  July  30,  1976  appointing 
Shri  Varadachary  as  the  Chairman  of  the  State  Bank 
for  the  period  commencing  from  August  4,  1976  and 
ending  with  February  28,  1977.  A  copy  of  this  noti- 
fication "was  also  endorsed  to  the  Establishment  Officer 
in  the  Deoartment  of  Personnel  and  Administrative 
Reforms,  Government  of  India. 

7.40  Under  the  relevant  Rules  framed  for  the 
Transaction  of  the  Business  of  the  Government  of 
India,  the  appointment  of  Chairman  of  the  State  Bank 
of  India  requires  the  approval  of  the  Appointments 
Committee  of  the  Cabinet.  Sub-clause  (a)  of  sub- 
section (1)  of  section  19  of  the  State  Bank  of  Tndia 
Ad,  1955,  reads  as  under  : — 

"19(1)  The  Central  Board  shall  consist  of  the 
following,  namely  :«— 

(a)  a  Chairman  and  a  Vice-Chairman  to  be 
appointed  by  the  Central  Government  in 
consultation  with  the  Reserve  Bank." 

Clause  (b)  of  section  2  of  the  Act  defines  the  Central 
Board  to  mean  the  Central  Board  of  Directors  of  the 
State  Bank  and  Clause  (bb)  defines  the  Chairman  as 
meaning  the  Chairman  of  the  Central  Board.  It  would 
be  seen  from  the  above  that  the  Chairman  of  the  State 
Bank  of  India  is  to  be  aooointed  by  the  Central  Govern- 
ment in  consultation  with  the  Reserve  Bank  of-  India. 


7.41  In  November,  1975,  the  then  Chairman  of  the 
State  Bank  of  India,  Shri  R.  K.  Talwar,  had  forwarded 
a  note  to  Shri  Varadachary  asking  for  his  comments 
on  certain  matters  indicative  of  improprieties  on  the 
part  of  Shri  Varadachary.  The  then  Chairman  had 
also  sought  to  bring  to  the  notice  of  the  Central  Board 
of  the  State  Bank  for  discussion  at  its  meeting  which 
was  to  be  held  on  March  30,  1976,  a  memorandum 
dealing  with  the  alleged  improprieties  on  Shri  Varada- 
chary's  part.  It  is,  however,  seen  that  as  desired  by 
Shr't  N.  C.  Sen  Gupta,  the  then  Secretary,  Department 
of  Banking  and  Shri  P.  K.  Mukherjee,  the  then  Minister 
for  Revenue  and  Banking,  Shri  M.  C  Balasubra- 
maniam,  the  then  Additional  Secretary  in  the  Depart- 
ment of  Banking,  who  was  also  a  Member  of  the 
Central  Board  of  the  State  Bank  met  Shri  Talwar 
and  advised  him  not  to  bring  the  subject  for  discussion 
before  the  Board.  Accordingly,  the  matter  was  not 
brought  before  the  Board  at  its  meeting  on  March  30, 
1976.  There  is,  however,  nothing  on  record  to  show 
that  the  Government  examined  the  matter  further  and 
satisfied  itself,  before  appointing  Shri  Varadachary  as 
the  Chairman  of  the  State  Bank,  that  he  was  not  guilty 
of  any  impropriety  as  alleged  by  the  then  Chairman. 

7.42  As  already  mentioned  above,  a  copy  of  the 
notification  issued  by  the  Department  of  Banking  on 
July  30,  1976  appointing  Shri  Varadachary  as  Chair- 
man of  the  State  Bank  of  India  with  effect  from  August 
4,  1976,  was  endorsed  to  the  Establishment  Officer  in 
the  Department  of  Personnel  and  Administrative 
Reforms.  This  appears  to  be  the  only  communication 
to  the  Secretariat  of  the  Appointments  Committee  of 
the  Cabinet  in  regard  to  this  appointment,  which 
required  the  approval  of  the  Committee, 

7.43  In  the  course  of  his  evidence  before  the  Com- 
mission Shri  N.  C.  Sen  Gupta,  former  Secretary, 
Department  of  Banking  had  indicated  that  the  intro- 
duction of  Sub-section  <IA)  in  section  20  of  the  State 
Bank  of  India  Act,  1955,  by  means  of  an  amendment 
thereto  in  1976  was  to  enable  the  Governmentt  to  place 
the  State  Bank  on  the  same  footing  as  other  nationalised 
Banks  and  that  the  amendment  was  not  intended  to 
enable  the  Government  to  relieve  Shri  R'.  K....Talwar 
of  his  office  as  Chairman  of  the  State  Bank  of  India. 
However,  the  first  paragraph  of  Shri  Pranab  Mukher- 
jee's  note  dated  June  24,  ]  976,  referred  to  above,  does 
not  appear  to  bear  out  Shri  Sen  Gupta's  testimony. 
It  is  also  seen  from  a  note  recorded  bv  Shri  J.  C.  Roy, 
an  officer  in  the  Department  of  Banking  on  Aueust  4, 
1976,  that  according  to  the  order  of  the  then  Minister 
for  Revenue  and  Banking,  Shri  R.  K.  Talwar  was  to 
be  served  with  a  notice  for  termination  of  his  term  of 
office  under  section  20(IA)  of  the  State  Bank  of.  India 
Act  and  further  that  the  notice  and  orocedure  for 
serving  it  had  been  finalised  in  consultation  with,  the. 
Ministry  of  Law. 

7.44  Regarding  consultation  with  the  Reserve  Bank 
Shri  Sen  GuDta  stated  before  the  Commission  that  he 
had  consulted  the  Governor  of  the  Reserve  Bank  orally 
and  in  this  connection  he  referred  to  a  letter  written  bv 
him  to  the  Governor  on  Julv  30,  1976.  The  only 
letter  that  Shri  Sen  Guota  had  written  to  the  Governor 
of  the  Reserve  Bank  in  this  regard  on  July  30,  1976 


56 


was  to  the  effect  that  on  a  request  made  by  Shri  R.  K. 
Talwar  he  had  been  sanctioned  leave  with  effect  from 
August  4,  1976  to  February  28,  1977.  There  is  no 
mention  in  that  letter  of  the  name  of  the  successor  to 
be  appointed  to  Shri  R,  K.  Talwar,  much  less  an 
indication  of  any  consultation  in  this  regard.  The 
only  reference  in  that  letter  to  a  successor  to  Shri  R.  K. 
Talwar  is  as  under  : 

"We  are  separately  issuing  Government  notifica- 
tion regarding  appointment  of  his  successor." 

When  faced  with  this,  Shri  Sen  Gupta,  in  the  course 
of  his  evidence  before  the  Commission,  said  "this  was 
really  an  ex-post-facto  consultation."  Needless  to 
add,  the  consultation  statutorily  required  could  certainly 
not  be  ex-post-facto,  apart  from  the  fact  that  there  is 
no  evidence  even  of  the  so-called  ex-post-facto 
consultation. 

7.45  Shri  Pranab  Mukherjee  who  had  been  requested 
to  assist  the  Commission  at  the  preliminary  stage  of 
its  inquiry  had  done  so,  but  he  indicated  that  before 
answering  any  questions  put  to  him  he  would  like  to 
make  a  submission  in  regard  to  the  propriety  of  doing 
so.  He  thereafter  said  that  the  oath  of  office  taken  by 
him  at  the  time  of  entering  upon  office  precludes  him 
from  answering  those  questions  which  involve  matters 
which  came  under  his  consideration  or  within  his 
knowledge  as  a  Minister.  However,  the  Commission 
gave  the  ruling  that  by  giving  any  information  before 
it,  Shri  Mukherjee  would  not  be  violating  either  the 
provisions  of  the  Official  Secrets  Act  or  the  oath  of 
office  taken  by  him.  Thereafter,  Shri  Mukherjee  pro- 
ceeded to  answer  the  queries  put  to  him  by  the  Com- 
mission. When  specifically  asked  whether  the  Reserve 
Bank  was  consulted  as  required  by  section  19  of  the 
State  Bank  of  India  Act,  Shri  Mukherjee  stated  as 
under  : — 

"Sir,  when  the  trouble  of  this  nature  started,  I  kept 
the  Reserve  Bank  Governor  informed  and 
I  had  some  discussions.  But  I  do  not  know 
whether  any  such  discussion  is  reported 
anywhere  in  the  files.  But  I  had  some  dis- 
cussions with  him  because  he  was  also  involv- 
ed in  the  whole  process.  But  I  cannot  tell 
exactly  whether  before  processing  the 
appointment  his  foimal  consultation  was 
obtained  or  not." 

In  this  case  again  it  was  Shri  Mukherjee's  claim  that 
the  consultation  was  oral,  that  he  spoke  not  on  one 
occasion' but  on  more  than  one  occasion  and  further 
that  he  did  not  recollect  whether  any  record  of  such 
Consultation  was  maintained.  Nor  could  he  indicate 
the  date  of  such  consultation.  In  response  to  the  Com- 
mission's inquiry  as  to  whether  he  thought  that  he 
should  either  have  recorded  a  note  regarding  the  con- 
sultation with  the  Reserve  Bank  or  at  least  have  asked 
someone  else  in  his  office  like  the  Secretary  to  make 
a  note  that  the  Governor  of  the  Reserve  Bank  had 
been  consulted  and  that  he  is  of  the  opinion  that  Shri 
Varadachary  should  be  appointed  as  Chairman  of  the 
State  Bank,  Shri  Mukherjee  said  : — 

"Sir,  in  fact,  when  I  went  through  the  rile  to 
refresh  my  memory  there  was  no  such 
noting." 


The  Commission  has  been  shown  a  number  of 
instances  where  in  view  of  urgency  of  the  matter  or 
for  some  other  reason  consultation  with  the  Reserve 
Bank  either  when  statutorily  required  or  otherwise 
has  been  oral  but  in  all  such  instances  the 'fact  of 
consultation  is  seen  to  have  been  recorded  contem- 
poraneously and  invariably  backed  up  by 
correspondence  indicating  such  oral  consultation,  ' 

In  the  light  of  the  consistent  practice  and  in  the 
light  of  the  nature  of  the  oral  testimony  of  Shri  Sen 
Gupta  and  Shri  Mukherjee,  the  Commission  is  of  the 
view  that  there  was  no  consultation  with  the  Reserve 
Bank  in  this  case,  as  was  required  in  terms  -of 
sub-clause  (a)  of  sub-section  (I)  of  section  19  of  the 
State  Bank  of  India,  1955. 

7,46-  On  April  30,  1977,  Shri  T.  R.  Varadachary 
wrote  a  letter  to  the  Prime  Minister  expressing  his 
shock  and  surprise  at  being  asked  to  hand  over  charge 
as  Chairman  of  the  State  Bank  of  India  with  effect 
from  that  day.  He  enclosed  thereto  a  note  dated 
April  21,  1977,  which  he  had  sent  to  the  then 
Secretary,  Department  of  Revenue  and  Banking.  The 
note,  according  to  him,  clarified  his  position  in  regard 
to  various  unfounded  allegations  made  against  him 
in  sections  of  the  press  and  otherwise  by  word  of 
mouth.  Certain  extracts  c£  the  note  had  been 
furnished  in  the  summary  presented  before  the 
Commission.  It  would  appear  therefrom  that  as  per 
Ws  own  statement,  Shri  Varadachary  had  met 
Shri  Sanjay  Gandhi  at  the  instance  of  Shri  Pranab 
Mukherjee  "to  lodge"  his  "claim"  for  appointment  as 
Chairman  of  the  State  Bank  of  India  and  that  he  had 
several  other  meetings  with  Shri  Sanjay  Gandhi  most 
of  thern  on  the  suggestion  or  direction  of  Shri  Pranab 
Mukherjee,  during  which  he  had  consulted  or  taken 
instructions  from  Shri  Sanjay  Gandhi  on  various 
matters  regarding  the  functioning  of  the  State  Bank 
including  staff  matters. 

7.47  In  response  to  detailed  inquiries  by  the 
Commission  in  this  regard  Shri  Pranab  Mukherjee 
denied  that  he  had  ever  asked  Shri  Varadachary  to 
see  Shri  Sanjay  Gandhi  in  relation  to  his  appointment 
or  other  matters  relating  to  the  State  Bank  although 
he  did  confirm  the  meeting  which  Shri  Varadachary 
had  with  the  Chairman  of  the  Delhi  Small  Industries 
Development  Corporation  at  Shri  Mukherjee's 
residence.  He  also  broadly  confirmed  Shri  Varada1 
charay's  statements  in  relation  to  most  of  the  matters 
except  in  as  far  as  they  related  to  references  to 
Shri  Sanjay  Gandhi.  He  was  specifically  asked 
by  the  Commission  as  to  whether  he  could  furnish  any 
reason  why  Shri  Varadachary  should,  in  a  letter 
addressed  to  the  present  Prime  Minister,  make  these 
statements  on  the  eve  of  his  handing  ove:r  charge  to 
another  officer,  and  whether  Shri  Mukherjee  could 
suggest  any  reason  why  Shri  Varadachary  should 
state  therein  something  which  is  not  true.  All  that 
Shri  Mukheriee  had  to  say  was  "Sir,  I  cannot  say 
anything  on  it." 

7.48  The  Commission,  however,  sees  no  reason  to 
disbelieve  the  facts  as  set  out  in  Shri  Varadachary's 
note  dated  April  21,  1977,  enclosed  to  his  letter  dated 
April  30,  1977,  to  the  Prime  Minister  although  it  was 


57 


not  possible  to  examine  Shri  Varadachary     as     the 

•  Commission  was  informed  that  he  was  abroad  and, 
therefore,  not  .readily  available. 

7.49  Although  Shri  Pranab  Mukherjec  assisted  the 
Commission  at.  the  preliminary  stage  of  its  fact  finding 
inquiry,  he  did  not  file  any  statement  in  this  case  as 
was  required  to  be  done  under  Rule  5(2)  (a)  of  the 
Commissions  of  Inquiry  (Centra!)  Rules,  3972.  He 
had  responded  to  the  summons  under  section  8B  of 
the  Commissions  of  Inquiry  Act,,  1952.  But  he 
refused  to  take  oath  and  tender  evidence.  However, 
from  the  facts  on  record  and  the  evidence  analysed 
above,  it  appears  that  the  normal  established  procedure 
in  regard  to  the  appointment  of  the  Chairman  of  i*he 
State  Bank  of  India  was  not.  followed  in  this  case  and 
further  that  it  was  not  in  accordance  with  the 
provisions  of  the  State  Bank  of  India  Act,  1955,  which 
made-  consultation  with  the  Reserve  Bank  of  India  a 
condition  precedent  to  the  appointment  of  the 
Chairman  by  the  Central  Government,  The 
Commission  is  of  the  view  that  considerations  other 
than  strictly  professional  and  totally  extraneous  have 
unfortunately  been  allowed  to  operate  in  arriving  at 
the  decision  to  appoint  Shri  Varadachary.  Shri  Pranab 
Mukherjee  has  violated  established  administrative 
conventions  and  procedures  and  misused  his  position 
in  the  appointment  of  Shri  Varadachary. 

5.  Deviation  from  established  procedure  and  irregulari- 
ties   in   the    appointment    of    Shri  T.  R.  Tuli    as 
Chairman,    and    Managing    Director    of    Punjab' 
■  National  Bank. 

7.50  Shri  P,  L.  Tandon's  term  as  Chairman  and 
Managing  Director  of  the  Punjab  National  Bank  was 
due'  to  expire  on  31-7-75.  Under  sub-clause  (a)  of 
Ciause  3,  read  with  sub-clause  (1)  of  Clause  8,  of  the 
Nationalised  Banks  (Management  and  Miscellaneous 
Provisions)  Scheme,  1970,  appointment. of  his  successor 
was  to  be  made  by  the  Central  Government  after 
consultation  with  the  Reserve  Bank  of  India,  Accord- 
ingly on  May.  12,  1975  the  then  Secretary,  Department 
ol'  Banking  wrote  to  the  Governor  Reserve  Bank, 
inter-  alia,  seeking  the  Res:rve  Bank's  views  .in  this 
regard.  In  his  reply  dated  May  14,  1975,  the  Governor 
of  the'  Reserve  Bank  wrote  that  the-  Reserve  Bank 
til ii'i ks  that  Shri  Tandon's  recommeiidiUion  in  favour  of 
Shri  O.  P.  Gupta  is  very  appropriate.  He  added  that 
in  fact  the  Rank  would  recommend  that  Shri  O.  P. 
Gupta  be  considered  very  seriously  for  the  succession 
straightaway.  The  then  Finance  Minister  agreed  with 
Reserve  Bank's  recommendation  that  Shri  O.  P.  Gupla 
who  was  then  the  Deputy  General  Manager  of  the 
Punjab  National  Bank  should  b'i  appointed  as  Us  Chair- 
man and  Managing  Director,  Accordingly,  with  the 
approval  of  the  Finance  Minister,  the  Department  of 
Banking  submitted  a  note  to  the  Appointment  Com- 
mittee of  the  Cabmet  on  the  May  13,  1975  seeking  the 
Appointments  Committee's  approval  to  Mr,  O.  P. 
Gupta's  appo:ntment.  The  proposal  as  approved  by 
the  Finance  Minister  was  submitted  by.  Shri  U.  C 
Aggarwal  Establishment  Officer,  on  June  4,  1975,  for 
approval  to  the  other  two  Members  of  the  ApDoin*- 
ments  Committee,  namely  the  Home  M-inister  and  the 

S/39;HA/77— 9  ..  v-  ' \,-v;  - 


Prims  Minister,  through  the  Cabinet  Secretary.  The 
Cabinet  Secretary  forwarded  it  to  the  -Home  Minister 
on  June  5,  1975.  Shri  K.  Brahmananda  Reddy,  the  then 
Home  Minister,  approved  it  on  June  7,  1975  aad 
passed  on  the  papers  to  the  Prime  Minister.  This  pro- 
posal lay  pending  with  the  Prime  Minister  for  a  long 
lims  and  no  decision  was  conveyed  to  the  then  Depart- 
ment of  Banking  until  after  the  Prime  Minister  approv- 
ed the  appointment  of  Shri  T.  R.  Tuli  to  the  same  post 
in  the  following  circumstances. 

7.51  On  July  15,  1975,  Shri  M.  G.  Balasubra-, 
manias,  the  then  Add!.  Secretary  in  the  Department  of 
Skulking,  recorded  the  following  minute  on  the  relevant 
file  of  the  Department  of  Banking  : 

"The  file  has  been  returned  from  F.M's.  office  for 
submission  of  revised  proposals.  I  have 
spoken  to  Governor,  RBI. 

He  recorded  the  following  further  minute  on  July  21, 

1975  :    " 

"I  enquired  of  the  Governor,  when  I  met  hifn  in 
Calcutta  on  19th  July,  1975,  about  RBl's 
report  to  us  regarding  Government's  proposal 
to  appoint  Mr.  T.  R.  Tuli  or  New  Bank  of 
India  as  Chairman.  Punjab  National  Bank 
about  which  I  had  spoken  to  him  over  the 
phone  on  15th  July,  1975.  Governor  told  me 
that  he  was  under  the  impression  that  I 
wouhi.be  writing  to  him  about  this  to  enable 
RBI  to  send  a  reply.  When  I  told  him  thaf 
my  understanding  was  different,  he  promised 
to  write  to  me  after  he  reaches  Bombay  on 
21st  evening. 

"The  Chairman  and  Managing  Director  is  to  be 
appointed  by  Government  after  consultation 
with  the  RBI  and  RBI  has  been  consulted, 
please  put  up  the  file  for  F.M.'s  orders  today 
itxetf,  whether  he  should  send  a  revised  note 
to  ACC  or  issue  the  ordeis  and  inform  the 
E.O.  to  keep  the  ACC  apprised." 

7.52  Accordingly,  a  note  was  recorded  on  the  same 
day,  namely  July  21,  1975,  by  Shri  D.  M.  Sukthankar, 
Director  in  the  Department  of  Bunking,  seeking  the 
Finance  Minister's  order,  inter  aim,  as  to  whether  a 
notification  appointing  Shri  T,  R,  Tuli  as  Chairman 
and  Managing  Director  of  the  Punjab  National  Bank 
may  be  issued  straightaway  and  the  Establishment 
Officer  requested  to  keep  the  Appointments  Committee 
of  the  Cabinet  apprised  or  whether  a  revised  note  fnav 
be  sent  to  the  Appointments  Committee  of  the  Cabinet 

■  for  obtaining  their  approval  to  the  revised  proposal. 
Shri  Sukthankar's  note  starts  by  saying  that  the  Gov- 
ernor, Reserve  Bank  of  India,  has  been  consulted  bv 
the  Additional  Secretary  regarding  the  Government's 
decision  to  appoint  Shri  T.  R.  Tuli.  Chairman,  N*w 
Bank  of  India  Ltd.  (a  Bank  in  the  Private  Sector)  as 
Chairman  and  Managing  Director  of  fhe  Punjab 
National  Bank  with  effect  from  Aueust  1.  1975.  Sieni- 
ficantlv  it  does  not  state  what  the  views  of  the  Reserve 
Bank  in  this  regard  ,were.  The  reason  for  this  omission 
will  be  clear  presently. 


58 


7.53  Shri  Subramaniam  minuted  on  July.  22,  1975 
that  Shri  Tuli  may  be  appointed  straightaway  for  a 
period  of  one  year  and  sought  the  then  Prime  Minister's 
approval  to  this.  The  then  Prime  Minister  approved  the 
proposal  on  July  24,  1975  and  accordingly  Shri  Tuli 
was  appointed  as  Chairman  and  Managing  Director  of 
the  Punjab  National  Bank  in  terms  of  notification  dated 
July  31,  1975  issued  in  this  regard.  Thereafter,  on 
August  5,  1975,  Shri  M.  G.  Balasubramaniam  wrote  a 
letter  to  Shri  U.  C.  Agarwal,  the  Establishment  Officer 
referring  to  the  earlier  note  of  the  then  Department 
of  Banking  regarding  the  appointment  of  a  new  incum- 
bent to  the  post  of  Chairman  and  Managing  Director 
of  the  Punjab  National  Bank  and  informed  him  that  it 
has  since  been  decided  with  the  approval  of  the  Prime 
Minister  to  appoint  Shri  T.  R.  Tuli  to  that  post  for  a 
period  of  one  year  with  effect  from  August  1,  1975. 
The  letter  also  indicated  that  the  Home  Minister  has 
also  been  kept  suitably  informed  by  the  Finance  Minis- 
ter's Office  and  went  on  to  suggest  that  the  Establish- 
ment Officer  may  perhaps  consider  recording  the  infor- 
mation suitably  in  the  office  of  the  Appointments 
Committee  of  the  Cabinet. 

7.54  The  Reserve  Bank's  views  on  the  Government's 
proposal  to  appoint  Shri  T.  R.  Tuli  of  the  New  Bank 
of  India  about  which  Shri  M.  G.  Balasubramaniam  had 
spoken  over  the  telephone  to  the  then  Governor  of 
Reserve  Bank  on  July  15,  1975  were  contained  in  the 
Governor's  letter  dated  July  22,  1975  (i.e.  one  day 
after  Shri  Sukthankar's  note  referred  to  at  paragraph 
3  above  was  submitted  to  the  Finance  Minister)  and 
was  received  in  the  Department  of  Banking  on  the 
July  23,  1975.  This  letter  gives  the  unmistakable  im- 
pression that  the  Reserve  Bank  was  not  very  enthusias- 
tic about  the  Government's  proposal  in  this  regard.  In 
his  testimony  before  the  Commission,  Shri  C.  Subra- 
maniam stated  that  he  would  "take  the  Reserve  Bank's 
report  as  neutral." 

7.55  In  response  to  a  query  as  to  why  the  proposal 
for  the  appointment  of  Shri  O.  P.  Gupta  which  the 
Finance  Minister  had  made  on  the  recommendation  of 
the  Reserve  Bank  was  not  carried  out,  Shri  Subra- 
maniam stated  that  while  this  was  being  processed,  the 
Prime  Minister  mentioned  that  Shri  Tuli's  name  should 
also  be  considered  for  the  post.  He  also  indicated  in  the 
course  of  his  testimony  that  he  did  not  know  Shri  Tuli 
before,  and  comparatively  speaking,  Punjab  National 
Bank  was  very  much  bigger  than  the  New  Bank  of 
Tndia.  When  asked  whether  the  Prime  Minister 
suggested  that  Shri  Tuli  should  be  appointed,  Shri 
Subramaniam,  replied  "yes". 

7.56  As  already  indicated  in  paragraph  4  above, 
Smt.  Gandhi  approved  the  proposal  to  appoint  Shri 
T.  R.  Tuli  straightaway  as  Chairman  and  Managing 
Director  of  the  Punjab  National  Bank  on  July  24,  1975. 
Thereafter,  on  the  very  next  day,  namely,  July  25,  1975, 
the  Original  proposal  submitted  to  the  Prime  Minister 
early  in  June  1975  to  appoint  Shri  O.  P.  Gupta  to  this 
post  was  returned  by  Shri  Ramachandran,  Joint  Secre- 
tary to  the  Prime  Minister  with  the  following  remark  : 

"It  was  learnt  that  Finance  Minister  was  not 
proceeding  with  this  proposal.  He  had  sepa- 
rately submitted  alternative  proposals  to  PM. 


PM  has  approved  Finance  Minister's  proposal 
to  appoint  Shri  T.  R.  Tuli,  at  present  Chair- 
man of  New  Bank  of  India  Ltd.,  as  Chairman 
and  MD  of  PNB  for  a  period  of  one  year 
w.e.f.  August  1,  1975.  Finance  Ministry  will 
be  sending  a  formal  note  to  E.O.;  giving 
details."-  i 

This  remark,  to  say  the  least,  is  intriguing  in  the  light 
of  Shri  C.  Subramaniam's  evidence  that  Shri  Tuli's 
name  was  suggested  by  none  other  than  the  then 
Prime  Minister  herself. 

7.57  Smt.  Gandhi  has  not  filed  any.statement  in  this 
case,  as  was  required  to  be  done  under  Rule5(2)(a) 
of  the  Commission  of  Inquiry  (Central)  Rules,  1972. 
She  had  responded  to  the  summons  under  section  8B 
of  the  Commissions  of  Inquiry  Act,  1952,  but  had 
refused  to  take  oath  and  declined  to  give  evidence. 
However,  it  .is  clear  from  the  foregoing  facts,  that  in 
this  case,  the  Finance  Minister  had  agreed  with  the 
recommendation  of  the  Reserve  Bank  that  Shri  O.  P. 
Gupta  may  bs  appointed  as  Chairman  and  Managing 
Director  of  the  Punjab  National  Bank.  The  proposal  in 
this  regard,  approved  by  the  Finance  Minister  and  the 
Horns  Minister,  had  been  submitted  to  Smt.  Gandhi  in 
her  capacity  as  one  of  the  members  of  the  Appoint- 
ments Committee  of  the  Cabinet.  When  this  proposal 
was  pending  with  her  for  her  concurrence,  she  sugges- 
ted the  name  of  Shri  T.  R.  Tuli  for  the  post  and  within 
a  very  short  time  thereafter  Shri  Tuli's  appointment  to 
this  post  was  approved.  It  is  also  seen  that  before 
arriving  at  this  decision  to  appoint  the  Chairman  of 
a  comparatively  small  bank  in  the  Private  Sector  to  the 
senior-most  position  in  one  of  the  biggest  Public  Sector 
banks  in  the  country,  ho  effort  was  made  to  consider 
the  suitability  for  this  post,  of  senior  Managers  within 
the  public  sector  banking-system  itself  as  had  been 
done  in  several  other  instances.  \ 

7.58  No  reason  whatsoever  has  been  given  for 
departing  from  the  recommendation  of  the  Reserve 
Bank  which  has  intimate  knowledge  of  the  working 
of  all  the  Banks  in  the  country  and  is,  therefore,  in  a 
position  to  judge  the  comparative  merits  of  the;varicus 
officers  for  top  positions  in  the  Banking  Sector.  This 
becomes  even  more  striking  since  Reserve  Bank's  re- 
commendation had  been  found  acceptable  by  the 
Finance  Minister  himself  and  by  the  Home  Minister. 
If  the  then  Prime  Minister  had  any  serious  difference 
of  opinion  in  this  regard,  there  .is  no  reason  why  the 
matter  could  not  have  been  discussed  by  her  with  the 
two.  other  members  of  the  Appointments  Committee 
or  in  the  alternative  whv  she  could  not  record  her  views 
in  this  regard  on  the  file  submitted  to  her,  instead  of 
virtually  directing  Shri  Subramaniam  to  submit  a  revis- 
ed proposal  in  favour  of  a  person  of  her  choice. 

7.59  Under  the  circumstances,  the  Commission  is  of 
the  view  that  this  is  yet  another  instance  where  the 
then  Finance  Minister  Shri  C.  Subramaniam  was  vir- 
tually compelled  to  fall  in  line  with  the  suggestion 
made  by  the  then  Prime  Minister,  Smt.  Gandhi  and 
that  such  compulsion  amounted  to  abuse  of  authority 
by  the  former  Prime  Minister.  It  clearly  resulted  in 
subversion  of  well-established  conventions. 


™~---'w™™Bm=irauj^™,P3ssw;ii.L,;.,n  ---.->--. "-'"--:.:::;,  jiSiiKSW.  >i   ■*■»!' 


6.  Deviation  from  the  established  procedure  for  the 
selection  of  officers  for  top  level  executive  post  in 
Public  Sector  Undertakings,  in  the  case  of  Li.  Gen. 
I:  _  T.  Satarawala,  as  Chairman-cma-Managing 
Director,  India  Tourism  and  Development  Corpora- 
tion 

7.60  At  the  request  of  the  Minister  for  Tourism 
and  Civil  Aviation,  the  Public  Enterprises  Selection 
Board  (PESB)  recommended  suitable  names  for  the 
post  of  Chairman-c«m-Managing  Director  of  India 
f  ou.rism  Development  Corporation.  According  to  Reso- 
lution No.  5(l)/74  of  Bureau  of  Public  Enterprises 
dated  August  30,  1974,  it  was  the  responsibility  of  the 
Board  to  select  persons  for  posts,  such  as,  full-time 
Chairman,  part-time  Chairman  and  Managing  Director 
for  all  Public  Sector  Corporations. 

7.61  The  P.E.S.B.  met  on  July  26,  1976  and  sug- 
gested the  names  of  Sh.  Ajit  Singh  and  Shri  B.  S.  Das, 
after  considering  eight  names  amongst  whom  was  the 

-  name  of  Lt.  Gen.  J.  T.  Satarawala,  The  recommenda- 
tion of  the  P.E.SJB.  was  communicated  to  the  Ministry 
on  August  9,  1976  and  a  draft  letter  requesting  "the 
Establishment  Officer  to  obtain  the  approval  of  the 
Appointments  Committee  was  prepared  by  the  Ministry. 
The  Secretary  Shri  N.  K.  Mukarjee  agreed  to  the  pro- 
posal and  marked  the  file  to  the  Minister  for  approval. 
The  Minister  then  desired  that  the  Minister  for  State 
may  also  see  the  proposal.  The  Minister  for  Slate  Shri 
Surindra  Pal  Singh  suggested  the  name  of  Lt.  Gen.  J.  T. 
Satarwala,  He  stated  that  in  his  opinion  to  bring  about 
a  change  at  die  topmost  level  in  I.T.D.C.,  would  be 
detrimental  to  the  national  interest.  The  Minister  for 
State  commented  that  Lt.  Gen.  Satarawala  was  keeping 
good    physical  condition   and  was    quite  capable    of 
shouldering  the  onerous   and  heavy  responsibility  of 
looking  alter  the  I.T.D.C. 

7.62  Shri  Raj  Bahadur  agreed  with  the  Minister  of 
State,  and,  accordingly,  a  revised  draft  was  prepared. 

It  was  dealt  with  by  the  Joint  Secretary  in  the  absence 
of  the  Secretary.  The  Appointments  Committee  of  the 
Cabinet  approved  the  appointment  of  Lt.  Gen.  Satara- 
wala, who  had  been  considered  by  the  P.E.S.B,  but  not 
recommended  for  appointment. 

7.63  It  is  not  a  healthy  convention  to  post  an  officer 
as  a  lop  level  executive,  who  was  earlier  interviewed 
and  not  considered  suitable  by  the  Public  Enterprises 
Selection  Board  to  the  exclusion  uC  the  names  in  the 
paiiel  recommended  by  the  P.E.S.B,  The  better  course 
would  have  been  to  request  the  P.E.S.B.,  to  suggest  a 
fresh  panel  of  names.  By  ignoring  the  recommenda- 
tions  of  a  statutory  body,  the  Government  was  making 
an  inroad  into  the  relevance  and  respectability  of  such 
a  body. 


addition  to  his  own  duties  as  wholetime  Member, 
International  Airports  Authority  of  India.  The  Ministry 
forwarded  to  the  Public  Enterprises  Selection  Board 
the  names  of  Shri  B.  S.  Das  and  two  others, 

7.65  The  matter  was  considered  by  the  Public 
Enterprises  Selection  Board  at  its  meeting  held  on 
December  4,  1975.  After  considering  the  suitability 
o'i  the  candidates  possessing  the  requisite  qualifications, 
the  P.E.S.B.  listed  five  persons,  amongst  whom  the 
first  was  Shri  B.  S.  Das, 

7.66  The  Board  recommended  Shri  B.  S.  Das  as  the 
most  suitable  person  for  appointment  as  Chairman, 
I.A.A.I.  The  recommendation  of  the  P.E.S.B.  was 
accepted  by. the  then  Minister  for  Tourism  and  Civil 
Aviation  and  the  Establishment  Officer  was  approached 
on  24th  December,  1975  to  seek  approval  of  the 
Appointments  Committee  of  the  Cabinet  for  appoint- 
ment of  Shri  B,  S,  Das  as  Chairman,  I.A.A.I. 

7.67  While  seeking  the  approval  of  the  A.C.C.  for 

appointment  of  Shri  Das,  the  Ministry  sent  only  his 
C.R..  dossiers  and  particulars  of  none  of  the  other 
candidates  considered  by  the  P.E.S.B.  were  forwarded. 

7.68  The  Appointments  Committee  of  the  Cabinet, 
however,  chose  to  disagree  with  the  recommendation 
of  the  P.E.S.B.  and  did  not  approve  the  proposal  to 
the  appointment  of  Shri  B.  S.  Das  as  Chairman. 
Instead,  the  Committee,  desired  that  Air  Marshal 
H.  C.  Dewan  be  appointed  to  the  post.  No  apparent 
reason  for  deviating  from  the  procedure  of  selection 
of  top  level  executive  officer  was  given.  Air  Marshal . 
H.  C.  Dewan  had  been  interviewed  by  the  P.E.S.B. 
but  was  not  found  suitable.  The  then  Minister  of 
Tourism  and  Civil  Aviation  choose  to  ignore  the 
Secretary's  noting  that  there  was  disparity  of  criteria 
as  between  P.E.S.B.,  and  A.C.C,  particularly  because 
.Air  Marshal  Dewan  had  been  considered  but  was  not 
recommended  by  the  P.E.S.B.  The  then  Minister, 
however,  directed  that  the  decision  of  the  A.C.C. 
should  be  complied  with. 

7.69  If  the  person  recommended  by  the  P.E.S.B., 
in  the  present  case  was  hot  acceptable  for  any 
particular  reason,  the  appointing  authorities  could  well 
have  asked  for  a  fresh  panel  of  suitable  candidates. 
By  not  doing  this  and  appointing  a  person  who  had 
been  interviewed  by  the  P.E.S.B.,  and  not  found 
suitable,  the  Government  has  exposed  itself  to  the 
charge  of,  to  say  the  least,  injecting  into  the  selection 
process  considerations  which  may  well  be  extraneous 
to  the  requirements  of  the  job.  Such  a  practice  does 
not  add  to'  the  credibility  of  established  institutions; 
rather  it  impaires  it. 


7.  Deviation  from  the  established  procedure  for     the 

selection  of  officers  for  top  level  executive  post  in 

Public  Sector  Undertakings — in  the  case  of     Air 

'■.Marshal  H.  C.  Dewan,  as  Chairman,  International 

Airport  Authority  of  India 

.  7.64  On  the  completion  of  the  tenure  of  Air  Marshal 
Y.  V.  Malse,  Shri  B.  S.  Das  was  appointed  to  look 
after  the  current  duties  of  the  post  of  Chairman  in 


8,  Misuse  of  powers  and  institution  of  false  criminal 
complaints  against  four  senior  officials  by  the  C.B.I. 
at  the  instance  of  Smt.  Indira  Gandhi 

7.70  A  question  asked  by  Shri  Jyotirmoy  Basu  in 
the  Parliament  seeking  to  elicit  information  from  the 
Government  concerning  import  of  machinery  by  Maruti 
Private  Limited,  was  listed  for  reply  on  April  16,  1975. 
Four  officers  of"  the  Ministries,   Shri  Krishnaswamy, 


60 


Deputy  Secretary,  Heavy  Industries;' Shri  A.  S.  Rajan, 
Development  Officer,  DGTD;  and  Shri  L.  R.  Cavale, 
Chief  Marketing  Manager,  P.E.C;  and  Shri  P.  S- 
-Bhatnagar,  Deputy  Marketing  Manager,  P.E.C,  were 
collecting  such  relevant  information  as  would  enable 
the  Minister  concerned  to  reply  to  the  question., 

7.71  In  the  process  of  gathering  information,  Shri 
Krishnaswamy  asked  Shri  Khosla,  an  officer  of  DGTD 
to  contact  the  Manager  of  Maruti  Private  Limited  and 
obtain  certain  information.  Shri  Khosla  accompanied 
by  Shri  Bharij.  visited  the  factory  of  Maruti  Limited  on 
April  10,  1975,  but  no  information  was  supplied  to 
them  by  the  Management  of  Maruti  Limited. 

7.72  Some  time  between  April  9  and  14,  1975, 
Shri  A.  S.  Rajan  and  Shri  P.  S.  Bhatnagar  contacted 
M/s.  Batliboi  and  Company  on  telephone  to  elicit  cer- 
tain information  in  relation  to  the  question,  which  was 
to  be  answered  in  the  Parliament.  On  April  14,  1975, 
Shri  R.  K.  Dhawan,  Additional  Private  Secretary  to 
the  then  Prime  Minister,  contacted  Shri  T.  A.  Pai, 
Minister  for  Heavy  Industries  on  telephone  and  com- 
plained against  the  conduct,  of  the  officers  of  his 
Ministry,  who  were  collecting  information  from 
M/s.  Batliboi  and  Company.  Ot\  April  15,  1975, 
Shri  R.  K.  Dhawan  spoke  to  Shri  A.  S.  Rajan  and 
Shri  P.  S.  Bhatnagar  on  telephone  and  directed  Shri 
P.  S.  Bhatnagar  to  desist  from  collecting  information 
relating  to  the  import  of  machinery  by  Maruti  Private 
Limited.  Shri  Cavale  has  corroborated  Shri  Bhat- 
nagar -s  statement.  He  himself  received  a  phone  call 
the  same  day  from  Shri  N.  K.  Singh,  Special  Assistant 
to  the  Commerce  Minister  wanting  to  know  what  trans- 
pired in  the  office  regarding  the  Parliament  Question 
on  Maruti. 

7.73  Shri  T.  A.  Pat  was  personally  called  by  the 
Prime  Minister  to  meet  her  at  her  residence.  Slur  Pai 
met  the  Prime  Minister.  According  to  his  recollection 
it  was  either  on  April  14  or  15,  1975.  He  has  stated 
that  he  found  Suit.  Gandhi  "completely  upset  and 
furious".  She  told  Shri  Pai  that  the  Management  of 
M/s.  Batliboi  and  Company  was  being  harassed  by 
the  officers  of  his  Ministry.  In.  the  presence  of  Shri 
Pai,  Smt.  Gandhi  called  Shri  Dhjawan  and  directed  him 
to  contact  Shri  D.  Sen,  Director,  CBI  and  ask  him  to 
start  inquiries  into  the  conduct  of  these  officers  and 
raid  their  houses.  She  also  asked  Shri  Dhawan  to  send 
for  Shri  D.  Sen. 

7.74  Smt.  Gandhi  also  called  Prof.  3:  P.  Chatio- 
padhyaya,  the  then  Minister  of  Commerce,  at  her 
residence  on  April  15,  1975  and  directed  that 
immediate  inquiry  should'  be  started  against 
Shri  Bhatnagar  because  he  had  caused  harassment  to 
certain  parties.  '  Shri  Chattopadhyaya  prepared  a 
note  on  April  15,  1975,  extract  from  which  is 
reproduced  below  : — 

"A  specific  case  was  brought  to  my  notice  today 
where  Shri  P.  S.  Bhatnagar,  Deputy  Market- 
ing Manager,  P.E.C.  kept  the  representatives 
of  a  firm  waiting  for  an  unduly  Jons  time 
and  coerced  theni  to  part  with  certain" infor- 
mation. The  manner  in  which  (he  informa- 
tion was  sought  to  be  obtained,  was  un- 
becoming of,  a  public  servant.    I  would  tike 


the  Chairman,   P.E.C.   to  take  disciplinary 
action  against  the  officers." 

Professor  Chattopadhyaya  in  his  evidence  before  the 
Commission  has  stated  that  he  discussed  the  matter 
with  the  "P.E.C.  officers  and  informed  them  of  what 
he  had  learnt,  from  the  Prime  Minister  and.-  ordered 
that  disciplinary  proceedings  should  be  commenced 
against  Shri  Bhatnagar.  According  to  Prof.  Chatto- 
padhyaya he  did  not  apply  his  mind  with  regard. to  the 
veracity  of  the  information  since  it  had  -come  from 
the  Prime  Minister  personally  and  he  thought  that 
the  Prime  Minister  must  have  full  information  and 
must  have  satisfied  herself  about  the  involvement  of 
Shri  Bhatnagar.  Shri  Chattopadhyaya  has  clearly  stated 
that  lie  thought  that  the  Prime  Minister  must  have 
Jipplied  her  mind,  especially  because  neither  before 
that  incident  nor  thereafter  had  she  ever  complained 
about  the  conduct  of  any  officer  and  that  was  why 
he  directed  the  action  as  suggested  by  her. 

7.75  Pursuant  to  the  order  made  by  Prof.  Chatto- 
padhyaya, Shri  Bhatnagar  was  ordered  to  be  suspended 
and  intimation  of  the  order  was  given  to  him:  some 
time  ar-about  10  p.m.  that  night— £&  April  15,  1975. 

7.76  Shri  T.  A.  Pai,  however,  had  called  his  officers 
earlier  and  had  satisfied  himself  that  there  was  no 
substance  in  the  allegations  made  against'  his  officers 
to  the  effect  that  they  were  responsible  for  harassment 
of  M/s.' Batliboi  and  Company.  Shri  Pai  had  also 
contacted  the  Manager  of  M/s.  Batliboi  and  satisfied 
'himself/fhat  the  allegations  that  there  was  ill-treatment 
of  tiic.cmpioyees  of  M/s.  Batliboi  Limited  was  without 
substance; 

7.77  The  orders  of  Smt.  Gandhi  were,  however, 
communicated  by  Shri  Dhawan  to  Slid  Sen,  Director  of 
CBI.  Shri  Sen  called  the  Deputy  Director,  Intelligence 
Cell,  Shri  Rajpal  on  April  15,  1975  evening  and  asked 
him  to  verify  the  information  against  Shri  Krishna- 
swami,  Shri  Rajan  and  Shri  Bhatnagar,  Shri  Rajpal 
was  informed  by  Shri  Sen  that  all  these  officers  were 
corrupt.and  had  assefs  disproportionate  to  their  known' 
sources  of  income.  Shri  Sen  directed  Shri  Rajpal  to 
collect  information  against  them  immediately  find  to 
furnish  a  report  within  five  days.  On  April  16; 1975, 
Shri  Rajpal  directed  his  subordinate  officers  to  collect 
the  requisite  information  and  also  to  mount  surveillance 
against  these  three  officers. 

7.78  Before  any  verification  could  be  made,  Shri 
Sen  directed  Shri  Rajpal  on  April.  16,  1975  to  send 
to  him  whatever  information  was  available  against 
those  officers.  The  relevant  files  were,  accordingly 
submitted  by  Shri  Rajpal  to  Shri  Sen.  Shri  Rajpal', 
however,  did  not  recommend  any  action  against  these 
officers,  since  the  verification  had  just  started.  Shri 
Sen,  however,  ordered  the  registration  of  regular  cases 
against  Shri  Bhatnagar  and  Shri  Rajan.  On  April  17, 
1975,  cases  were  formally  registered  against  Shri  Bhat- 
nagar and  Shri  Rajan  under  the  Prevention  of  Corrup- 
tion Act  for  being  in  possession  of  assets  dispropor- 
tionate to  their  known  means.  On  April  18,  1975, 
their  residential  premises  were  searched  by  the  CBI 
officers. 


flea  ,-  ;    -_   **  _    ^  ^tf«jfiiiabS^^asiiutiiiBii£«a^ 


61 


7.79  The  S.T.C.  authorities,  who  had  control  over 
Shri  Bhatnagar  and  Shri  L.  R.  Cavale  were  also  gal- 
.vanised  into- action  in  pursuance  of  the  note  sent  by 
Shri  D.  P.  Chattopadhyaya.  Shri  Bhatnagar  was  serv- 
ed with  the  suspension  Order  at  his  residence  an  the 
night  of  April  15,  1975.  Shri  Cavale  was  transferred 
to:  Madras  from  Delhi.  This  order  was  initially  dated 
April  16,  1975.  Then  this  order  was  withdrawn  and 
a  fresh  order  dated  April  15,  1975,  with  'identical 
contents  was  again  served  upon  Shri  Cavale.  The  fact 
that  the  date  of  the  transfer  order  was  changed  from 
April  16  to  15  is  significant  insofar  as  the  authorities 
were  anxious  to  make  it  appear  that  there  ■  was  no 
delay  in  the  execution  of  the  orders.  Shri  Cavale  did 
not  accept  the  transfer  meekly  and  protested  against 
the  order  of  the  Chairman,  S.T.C. 

7.80  Shri  P.  J,  Fernandes,  Director  General,  Bureau 
of  Public  Enterprises,  took  up  the  matter  relating  to 
the  transfer  of  Shri  Cavale  with  the  Chairman  of 
S.T.C.  Shri  P.  J.  -Fernandes  was  informed  by  the 
Chairman  that  he  was  helpless  and  that  he  was.  acting 
under  superior  instructions.  Shri  Cavale,  then  per- 
sonally met  the  Chairman,  who  also  advised  him  that 
in  order  to  avoid  further  "complications  and  possible 
■harassment",  he  should  accept  the  order  of  transfer 
and  proceed  to  Madras.  Shri  Cavale  was  unwilling 
to.  accept  the  advice.  The "  CBI  started  verification 
on  him  on  April  21,  1975  and  he  was  placed  under 
surveillance.  .  The  inquiry  against  Shri  Cavale  did  not 
reveal  any  incriminating  material  against,  him  justifying 
registration  of  a  case  against  him.  Bui  on  April  27, 
1975,  Shri  Sen  ordered  registration  of  a  preliminary 
inquiry.  Shri  Sen  also  ordered  that  copies  of  the ' 
report  of  the  preliminary  inquiry  should  not  be  sent 
to  the  usual  recipients.  The  Intelligence  Cell  was  also 
asked  to  collect  further  information  so  that  the  preli- 
minary inquiry  could  be  converted  into  a  regular  case. 
This  clearly  implied  that  the  preliminary  inquiry  was 
inevitably  to  be  converted  irito  a  regular  case.  The 
Intelligence  Cell  was,  however,  unable-  to  collect  any 
reliable  material  on  which  a  complaint  could  be  regis- 
tered against  Shri  Cavale. 

7.81  According  to  Shri  K,  Vijayan,  S.P.,  he  was. 
pressurised  by  Shri  A.  B.  Chaudhary,  Joint  Director 
to  write  a  note  suggesting  that  the  house  of  Shri  Cavale 
should  be  searched.  Accordingly,  Shri  Vijayan  re- 
corded a  note,  and  on  the  basis  of  his  note  the  house 
of  Shri  Cavale  was  searched  on  May  3,  1975;  and  a 
regular  case  was  registered  against  Shri  Cavale  for 
investigation  under  the  Prevention  of  Corruption  Act. 

7.82  The  harassment  of  Shri  Cavale  did  not,  how- 
ever, stop  at  that  stage.  He  was  asked  by  the  Chair- 
man of  the  S.T.C.  to  resign  from  his  office.  Shri  Cavale 
was  informed  that  if  he  continued  to  remain  in  the 
office,  he  may  get  involved  in  more  trouble  and  harass- 
ment may.  increase.  Apparently,  under  pressure,  Shri 
Cavale  submitted  his  resignation,  which  was  promptly 
accepted. 

-  7.83  The  residential  premises  of  Shri  Krishnaswamy 
were  searched  on  May  3,  1975.  It  appears  that  even 
though  there  were  not  sufficient  materials  to  warrant 
any  action  against  Shri  ICris*!inaswamy.     On  April  27, 


1975  Shri  Sen  desired  that  a  preliminary  inquiry  should 
be  registered  against  him.  This  was  in  spite  of  the 
fact  that  Shri  Rajpal  was  bold  enough  to  point  out 
to  Shri  D.  Sen  repeatedly  that  Shri  Krishnaswamy  had 
a  good  reputation,  his  standard  of  living  was  moderate 
and  that  he  came  from  a  well-off  family.  Here  also 
it  was  directed  that  the  registration  report  should  not 
be  sent  to  the  usual  addresses,  ostensibly,  to  maintain 
secrecy!  On  April  27,  1975,  the  Joint  Director,  Shri 
Chaudhary,  indicated  that  after  more  information  was 
available,  the  preliminary  inquiry  would  be  converted 
into  a  regular  case.  The  case  was,  accordingly,  regis- 
tered on  May  2,  1975  and  the  house  of  Shri  Krishna- 
swamy was  searched  on  May  3,  1975.  Shri  Krishna- 
swamy, who  belonged  to  the  Railway  Service  and  was 
on  deputation  with  the  Ministry  of  Industries,  proceed- 
ed on  August  18,  1975,  on  four  months'  leave,  in  view 
of  his  continued  harassment.  This  leave  was  extended 
on  half-pay.  In  February,  1976  Shri  Krishnaswamy 
was  reverted  to  his  parent  cadre  in  the  Railways.  Even 
thereafter  the  CBI  apparently  tried  several  methods 
to  scrutinise  all  the  files,  which  Shri  Krishnaswamy 
had  dealt  with  in  the  performance  of  his  duties  in  the 
Industries  Ministry.  Nothing  incriminating  was  found 
against  him.  A  case  under  the  Excise  Act  was  insti- 
tuted by  the  Delhi  Police,  at  the  instance  of  the  CBI 
for  alleged  possession  of  liquor  beyond  the  permissible 
limit  discovered  during  the  search  of  the  residence  of 
Shri  Krishnaswamy. 

7.84  The  trial  court  did  not  fine!  Shri  Krishnaswamy 

guilty  of  any  violation  and  acquitted,  him  on  March 
4,  1977. 

7.85  Wife  of  Shri  Krishnaswamy  was  also,  harassed 

on  certain  allegations  of  being  involved  in  some  Foreign 
Exchange  transactions.  Even  the  bank  locker  of  the 
father  of  Shri  Krishnaswamy,  a  former  officer  of  the 
Government  of  India  in  the  Indian  Audit  and  Accounts 
Service  was  searched  at  Madras. 

7.86  In  the  proceedings  taken  against  ail  the  four 
officers,  pursuant  to  which  cases  were  started  by  the 
CBI  practically  nothing  was'  ^.detected  and  ultimately 
the  proceedings  under  the  Prevention  of  Corruption 
Act  relating  to  the  allegation  of  possessing  assets  dis- 
proportionate to  the  known  sources  of  income  were 
abandoned  in  all  the  cases. 

7.87  All  the  four  officers  were  examined  by  the 
Commission.  At  the  preliminary  stage  the  affidavit  of 
Shri  Rajan  was  read  out  as  he  was  not  available.  He 
appeared  at  the  second  stage  of  the  inquiry  and  he  was 
examined   by   the  Commission. 

7.88  From  the  sequence  of  events  it  appears  that 
afier  the  four  officers  attempted  to  collect  information 
in  the  performance  of  their  duties  between  April  9  and 

15,  1975,  to  enable  the  Minister  concerned  to  reply 
to  the  Starred  Question  before  the  Parliament  on  April 

16,  '1975,  Shri  Dhawan -spoke  to  Shri  Rajan  and  Shri 
Bhatnagar  On  telephone  and  told  Shri  Bhatnagar  not 
to  make  any  •  inquiries  concerning  Maruti  Private 
Limited.  Either  on  April  14  or  15  and  more  probably 
on  April  15,  1975,  Shri  T.  A.  Pai  was  summoned  to 
the  house  of  the  Prime  Minister  and  lie  was  told  by 


62. 


the  Prime  Minister  that  the  Management  of  M/s. 
Batliboi  and  Company  was  being  harassed  by  the 
officers  of  his  Ministry.    To  use  the  words  of  Shii  Pai  : 

"She  started  talking  about  corruption,  tfeat  my 
officers  were  talking  about  it  and  all  that 
and  they  are  corrupt  themselves  and  what 
she  said  was  not  quite  relevant.  1  could 
not  make  out  because  she  was  so  furious  and 
angry;  that  before  I  could  answer,  she  had 
called  Shri  Dhawan  and  asked  their  houses 
are  to  be  raided  and  Shri  Sen  to  be  sent 
for." 

Shri  T.  A.  Pai,  however,  on  inquiries  made  by  him 
found  the  charges  baseless. 

7.89  Prof.  Chattopadhyaya,  however,  consulted  his 
officers  and  action  was  taken  against  Shri  Bhatnagar 
by  suspending  him  forthwith. 

7.90  Shri  Dhawan  has,  in  his  evidence  before  the 
Commission,  denied  that  Smt.  Gandhi  had  told  him 
anything  regarding  action  to  be  taken  against  the 
officers  of  the  Ministries  of  Heavy  Industries  and 
Commerce  in  the  presence  of  Shri  T.  A.  Pai;  but  he 
stated  that  he  was  directed  by  Smt.  Gandhi  lo  contact 
Shri  D.  Sen  and  to  check  the  antecedents  of  the  four 
officers  concerned.  Accordingly,  Shri  Dhawan  con- 
tacted Shri  D.  Sen.  According  to  Shri  D.  Se-n,  Shri 
Dhawan  came  to  him  personalty  in  his  office  and  gave 
the  information.  Shri  Dhawan  is  not  certain  whether 
he  talked  to  Shri  Sen  on  telephone  or  personally.  The 
version  of  Shri  Dhawan,  to  quote  his  own  words  is  t 

"Chairman  :  Did  you  go,  at  the  instance  of  the 
Prime  Minister  to  Mr.  Sen,  or  in  your  capa- 
city without  an  order  from  the  Prime 
Minister  ? 

Witness  :  No,  I  did  not  go  in  my  own  capacity. 
Since  the  complaints  had  come  to  the  Prime 
Minister  and  the  Prime  Minister  said  that 
there  are  complaints  about  them.  We  should 
check  about  antecedents.  So,  I  had  passed 
on  this  information  to  Mr.  D.  Sen,  that  tiie 
Prime  Minister  had  re:eived  complaints  about 
these  officers. 

Chairman  i  Were  you  asked  by  the  Prime  Minister 
■    to  go  ? 

Witness  :  Yes,   I  was  given  the  names  to  pass 
on  this  information  on  to  Mr.  Sen  only  to 
'  check  ? 

Chairman  :  By  the  Prime  Minister  ? 

Witness  :   Yes,  by  the  Prime  Minister. 

Chairman  :  Did  you  tell  Mr.  D.  Sen  that  the 
Prime  Minister  had  given  this  information  to 
you? 

Witness;  Wei!,  I  do  not  remember  at  this  stage 
that  I  think  she  must  have  definitely,  told 
me;  otherwise  I  do  not  have  any  locus  stand1 
on  my  own  to  say." 


7.91  Shri  Sen  maintained  no  record  of  the  commu- 
nication made  by  Shri  Dhawan  to  him,  but  uiidisput- 
ably  the  machinery  of  the  C.B.I,  was  moved  into  swift 
action  against  the  four  officers  concerned.  Shri  Bhat- 
nagar was  immediately  suspended  and  an  order  to  that 
effect  was  served  upon  him  the  very  same  night.  Secret 
inquiries  were  started  agaiinst  Shri  Rajan  and  Shri 
Bhatnagar,  and  soon  thereafter  regular  cases  were 
registered  against  them. 

7.92  The  activities  of  the  officers  performed  in  the 
discharge  of  their  duties  were  apparently  not  liked  by 
Smt.  Gandhi.  The  evidence  does  not  disclose  that 
there  was  any  harassment  of  the  officers  of  M/s. 
Batliboi  and  Company.  Two  representatives  of  M/s. 
Batliboi  and  Company  have  been  examined,  namely, 
Shri  Adeshra  and  Shri  Mathur  and  they  have  denied 
that  anyone,  either  Shri  Bhatnagar  or  Shri  Rajan  had 
come  to  the  office  of  M/s.  Batliboi  and  Company  and 
they  have  also  stated  that  it  is  not  true  that  any  repre- 
sentative of  M/s.  Batliboi  and  Company  was  insulted. 
They  have  also  stated  that  they  had  made  no  complaint 
to  anyone.  Even  though,  there  was,  therefore,  no  case 
of  any  harassment  of  any  officials  of  M/s,  Batliboi  and 
Company,  stringent  measures  were  apparently  taken 
in  reprisal  against  the  action  taken  by  Shri  Bhatnagar 
and  Shri  Rajan  in  the  performance  of  their  duties. 
These  officers  were  performing  their  duties  and  collect- 
ing information  which  had  to  be  supplied  to  the  Minis- 
ter so  as  to  enable  him  to  answer  the  question  before 
the  Parliament  on  April  16,  1975.  The  houses  of 
both  these  officers  were  searched  without  any  reason 
and  nothing  incriminating  had  been  found. 

7.93  Regular  cases  under  Prevention  of  Corruption 
Act  were  registered  against  Shri  Krishnaswamy  and 
Shri  Cavaie  and  their  houses  were  raided  by  the'  CBI. 
Against  Shri  Krishnaswamy  proceedings  were  taken 
under  the  Excise  Act  and  also  against  his  wife  for  an 
alleged  infringement  of  the  Foreign  Exchange  Regu- 
lation. Shri  Krishnaswamy  was  also  reverted  to  his 
parent  (Department  and  Shri  Cavaie  was  pressurised  to 
submit  his  resignation  when  he  showed  his  unwilling- 
ness to  carry  out  the  transfer  orders.  Shri  Cavale's 
wife  also  lost  her  job  on  account  of  the  steps  taken 
against  him. 

7.94  Shri  T.  A.  Pai  sent  a  letter  to  the  Prime 
Minister  on  or  about  May  5,  1975,  after  the  searches 
of  these  officers  had  taken  place  and  narrated  the  ac- 
tion which  was  taken  against  them.  Smt.  Gandhi,  by 
her  letter  dated  May  7,  1975,  replied  that  in  the 
course  of  the  searches  the  CBI  had  found  that  (he 
officers  in  question  seemed  to  be  in  possession  of 
assets  disproportionate  to  their  known  sources  of  in- 
come. She  in  her  letter  had  stated  that  the  information 
against  the  officers  had  been  received  by  the  CBI 
while  Shri  Dhawan  in  his  deposition  before  the  Com- 
mission has  stated  that  he  had  passed  on  the  informaT 
tion  to  the  CBI  at  the  instance  of  Smt.  Gandhi.  She 
had  also  written  in  that  letter  that  these  officers  did 
not  seem  entitled  to  any  support.  Smt.  Gandhi  had 
enclosed  a  note  from  (he  CBI .  which  explained  the 
position  in  some  detail,  But  this  assertion  appears  to 
have  been  proved  unjustified.  ■  It  may  be  sufficient 
to  observe  that  at  the  conclusion  of  the  investigation, 


■x:^::ziriKtt--'&?j&^yysr¥&Z?*  I 


63 


nothing  was  disclosed  and  the  entire  proceedings  start- 
ing with  the  searches  were  undertaken  merely  because 
information  was  received  by  Shri  D.  Sen  from  Shri 
Dhawan  at  the  instance  of  Smt.  Gandhi.  The  said 
information"  was  supported  by  no  other  useful  evidence, 
Shri  Sen  in  his  evidence  was  unable  to  throw  any 
light  on  the  finding  of  any  assets  disproportionate  to 
the  known  sources  of  the  income  of  these  officers. 
The  cases  under  the  Prevention  of  Corruption  Act 
were  ultimately  dropped. 

7.95  Smt.  Gandhi  has  not  filed  any  statement  in 
reply  to  the  notice  under  rule  5  (2)  (a)  of  the  Rules 
nor  has  she  chosen  to  give  evidence  in  pursuance  to 
the  summons  issued  under  section  8B  of  the  Act. 
Shri  Dhawan  has  denied  that  in  the  presence  of  Shri 
Pai  he  was  asked  by  Smt.  Gandhi  to  have  the  houses 
of  the  four  officers  searched.  He  has  stated  that  some 
MPs  and  others  had  complained  to  Smt.  Gandhi 
about  the  corruption  prevailing  and  about  the  four 
officers  in  particular  and  he  had  conveyed  ihis  infor- 
mation either  personally  in  the  office  of  Shri  D.  Sen 
or  on  telephone.  It  is  indeed  a  strange  coincidence 
that  the  MPs  were  complaining  only  against  the  offi- 
cers who  were  engaged  in  the  collection  of  information 
relating  to  Maruti.  Between  the  testimony  of  Shri 
T.  A.  Pai  and  Shri  Dhawan  viewed  in  the  light  of  the 
rest  of  the  evidence,  the  Commission  has  no  hesitation 
in  accepting  the  testimony  of  Shri  T.  A.  'Pai. 

7.96  The  evidence  in  the  view  of  the  Commission 
discloses  a  gross  abuse  of  the  authority  vested  in 
Smt.  Gandhi.  She  had  taken  into  her  head  to  act  as 
she  did  merely  because  the  officers  of  the  Commerce 
and  Industries  Ministries  had,  in  the  discharge  of 
their  duties  taken  steps  to  acquire  information  which 
was  likely  to  affect  the  interest  of  Maruti  Limited. 
She  pressurised  Shri  Sen  to  take  proceedings  for  search- 
ing their  houses  and  for  fifing  complaints  against  them 
under  the  Prevention  of  Corruption  Act,  which  were 
wholly  unjustified  and  which  were  eventually  dropped. 

7.97  A  notice  under  rule  5(2)(a)  of  the  Rules  and 
summons  under  section  8"B  of  the  Act  Were  issued 
also,  to  Shri  R.  K,  Dhawan  and  Shri  D.  Sen.  They 
■appeared  before  the  Commission  and  led  evidence  in 
suppoit  of  their  defence.  Shri  D.  Sen  has  also  filed 
his'  sin  foment  lit  response  to  rule  5(2)(a)  notice, 

7.98  The  role  of  Shri  R,  K.  Dhawan  appears  to 
have  been  merely  to  convey  the  message  of  Smt. 
Gandhi  to  Shri  D.  Sen.  Beyond  that  no  other  action 
can  be  attributed  to  him,  which  in  turn  could  be  in- 
terpreted to  have  activated  the  subsequent  processes  of 
law  that  were  set  in  motion  by  Shri  Sen.  According- 
ly, therefore,  the  Commission  does  not  take  a  serious 
view  of  the  activities  of  Shri  R.  K.  Dhawan  in  this 
case. 

7.99  Shri  D.  Sen,  in  his  statement  filed  in  response 
to.  the  notice  under  rule  5(2)(a)  has  stated  that  in 
accordance  with  the  provisions  of  section  157  Cr.  P.C. 
he  had  to  register  cases  against  those  Officers  after 
having  received  the  information  from  Shri  R.  K. 
■Dhawan  and  that,  in  fact,  if  he  had  delayed  the  regis- 
tration of  the  cases,  it  might  have  been  dereliction  of 


duty  on  his  part  and  he  could  have  been  blamed  for 
that.  This  contention  is  not  tenable  if  only  for  the 
reason  that  registration  of  cases  under  section  157 
Cr.  P.C.  should  have  been  preceded  by  the  availability 
of  information  which,  prima  facie,  makes  out  an 
offence. 

7.100  In  the  present  cass  the  information  brought 
on  record  by  the  Intelligence  Unit  after  the  secret 
inquiries,  was  not  of  a  nature  which  could  be  said 
to  have  constituted,  prima  jade,  commission  of  an 
offence  by  the  officers  concerned.  It  was  also  noticed 
that  Shri  D,  Sen  had  no  valid  explanation  for  his  not; 
recording  in  writing  the.  exact  information  that  he  had 
received  from  Shri  R.  K.  Dhawan  at  the  instance  of 
Smt.  Gandhi.  Repeated  questions  put  by  the  Com- 
mission to  Shri  D.  Sen  on  this  point  failed  to  evoke 
any  useful  reply. 

7.101  The  conduct  Of  Shri  Sen  discloses  that  lie 
has  misused  his  authority  in  directing  that  First  In- 
formation Reports  be  filed  against  all  the  four  officers 
and  in  starling  proceedings  against  them. 

7.102  The  evidence,  therefore,  discloses  that  Smt. 
Gandhi  was  responsible  for  institution  of  criminal 
proceedings  against  the  four  officers  concerned,  having 
their  houses  searched  and  subjecting  them  to  humilia- 
tion; merely  because  they  were  responsible  for  collect- 
ing information  in  the  discharge  of  their  duties,  which 
would  have  been  prejudicial  to  the  interests  of  Maruti 
Limited,  a  concern  in  which  Shri  Sanjay  Gandhi,  her 
son,  was  vitally  interested. 

7.103  This  case  brings  into  focus  certain  undesir- 
able aspects  of  the  functioning  of  the  CBI  which  in 
the  view  of  the  Commission  need  to  be  looked  into- 
immediately  with  a  view  to  prevent  a  recurrence  of  the 
type  of  abuse  of  authority  and  misuse  of  power  by  the 
Director,  CBI,  in  future.  It  is  imperative  for  the  CBI 
to  realise  that  in  setting  afoot  a  series  of  actions 
against  individuals — whether  officials  or  non-officials — ■ 
they  are  irretrievably  damaging  the  reputation  and 
social  standing  of  the  individuals  concerned.  They 
should  not,  therefore,  be  allowed  to  initiate  proceed- 
ings against  anyone  unless  it  is  ensured  that  the  facts 
on  record  warrant  the  type  of  proceedings  that  they 
launch  on. 

7.104  In  the  present  case  there  was  nothing  against 
any  of  the  four  officers  except  the  vague  complaints* 
if  at  all,  allegedly  made  by  the  MPs  and  conveyed  to 
the  Director,  CBI  by  Shri  Dhawan  at  the  instance  of 
the  Prime  Minister.  Initial  enquiries  actually  reveal- 
ed nothing  specific  against  any  of  them.  Rather  Shri 
Krishnaswamy  was  reported  to  be  enjoying  a  good  re- 
putation. And  yet  the  CBI  mounted  the  whole  series 
of  actions  in  their  armoury  at  the  end  of  which  nothing 
incriminating  was  found.  But  in  the  process  the  CBI 
had  destroyed  these  officers  socially,  physically  '  and 
morally.  Now  that  we  have  seen  that  even  the  man  at 
the  top  of  the  CBI  with  all  his  seniority  and  status 
can  still  lend  himself  and  his  organisation  to  serve 
purposes  other  than  strictly  legal,  constitutional  and 
moral,  it  has  to  ba  ensured  that  in  future  no  such 
individual  or  organisation  should  be  capable   of  being 


rendered  a  helpless  and  unquestioning  tool  in  the 
hands  of  the  powers  that  be.  The  Commission  feels 
that  certain  safeguards  need  to  be  provided  by  making 
the  Director  CBI  accountable  to  an  independent  body. 
Yet  another  suggestion  can  be  that  the  Director  CHI 
may  be  statutorily  rendered  independent  of  the  exe- 
cutive Ministry  and  his  term  of  office  made  subject,  to 
a  tenure. 

9.  Unlawful  detention  of  Textile/ Customs  employees 
under  MISA  by  Delhi  Administration  and  institu- 
'  don  of  false  CBI  cases  against  four  of  them. 

7.105  S/Shri  B.  D.  Ghosh,  A.  K.  Chakravorty, 
R.  C.  Jain,  S.  K.  Walia,  R.  Rangaraja,  R.  S. 'Gupta, 
C.  S.  Venkatesh,  V.  B.  Bhambri  and  Asutosh  Mukher* 
jee  were  working  as  Inspectors  in  the  Regional  Office  of 
Textile  Committee  Delhi  during  April-May,  1976. 
Shri  S.  N.  Chatterjee  was  the  Assistant  Inspecting 
Officer  in  the  same  office.  The  Inspectors  working 
in  the  Textile  Committee  Office  were  required  to 
obtain  from  the  Textile  Committee  a  certificate  to 
the  effect  that  the  fabric  from  which  the  garments  were 
made  was  mill-made  or  handloom.  The  Textile  Com- 
mittee is  required  to  ensure  that  no  garments  which 
are  made  out  of  mill-made  cloth  are  mis-declared  as 
made  from  handloom  fabric.  During  the  same  period, 
S/Shri  Sumer  Singh  Yadav  and  M.  S.  Malik  were 
working  as  Customs  Inspectors  at  Palam  Airport  and 
they  used  to  deal  with  exports.  Their  duty  included 
enforcing  Export  Trade  Control  Restrictions  in  the 
matter  of  exports  and  also  ensuring  that  correct  rates 
of  'draw  back'  are  granted  to  the  exporters.  'Draw 
back'  is  a  refund  of  central  excise  duty  to  the  exporter 
when  the  goods  are  exported  out  of  the  country,  the 
rate  varying,  depending  on  the  incidence  of  duty  on  the 
item  of  raw  materia], 

7.106  On  April  22,  1976,  Shri  S.  S.  Yadav,  who 
was  one  of  the  Customs  Inspectors,  was  told  by  his 
Superintendent  to  draw  samples  from  the  consignment 
of  certain  packages  belonging  to  M/s.  Indira  Interna- 
tional for  determining,  for  draw-back  purposes,  whe- 
ther the  garments  were  actually  of  mill-made  cloth,  as 
claimed  by  the  exporters,  or  of  power-loom  cloth. 
Pending  the  furnishing  of  the  samples,  the  export  of 
the  consignments  had  not  been  permitted.  On  the 
basis  of  the  samples  drawn  by  Shri  Yadav,  he  was  of 
the  view  that  the  exporters  had  misdeclared  the  goods 
for  obtaining  illegal  benefit  of  draw-back  at  a  higher 
rate.  Sim  Yadav  tried  to  explain  to  the  Clearing 
Agent  of  M/s.  Tndira  International  that  the  firm  was 
cheating  the  Government  by  mis-declarine  that  the 
garments  were  made  out  of  mill-cloth  while  actually 
they  were  made  out  of  nower-loom  cloth.  On  this 
occasion,  the  Customs  Officer  was  threatened  and 
told  that  the  consignment  belonged  to  the  mother-in- 
law  of  Shri  Sanjav  Gandhi,  the  son  of  the  then  Prime 
Minister  Smt.  Indira  Gandhi:  and  that  (he  "officers  will 
have  to  pay  the  nrice  for  the  hold-un  of  the  consign- 
ment". Out  of  fear,  the  Customs  Authorities  allow- 
ed their  consignment  to  be  exported  without  any 
action. 

7.107  Shri  R.  D.  Bhatnagar.  one  of  the  Insoectors 
in  the  Textile  Committee,  had  visited  M/s.  Indira  In- 
ternational in  the  course  of  his  official  business.  Ear- 
lier to  that  Shri  A.  K.  Chakravorty,  another  Textile 


Inspector,  had  rejected  a  consignment  of  ready-made 
garments  of  M/s.  Indira  International.  When  Shri 
Bhatnagar  met  Smt.  Doddy  of  M/s.  Indira  Interna- 
tional, she  appeared  very  much  annoyed  and  threaten- 
ed that  if  shipments  were  rejected  or  delayed  by  the 
officers  of  the  Textile  Committee,  she  would  see  that 
drastic  action  was  taken  against  the  officers. 

7.108  Shri  Suri  had  been  told  by  Shri  S.  K.  Mocli 
of  Modi  Yarn  Mills  and  also  by  Shri  Kapoor,  Manager 
of  the  Indira  International,  that  Shri  Sanjay  Gandhi's 
mother-in-law  was  interested  in  the  Indira  international 
and  that  ihey  should  take  care  that  the  him  had  no 
trouble  in  the  transaction  of  their  business. 

7.109  Some  time  in  the  last  week  of  May,  1976, 
Shri  S.  C.  Suri,  Inspecting  Officer  in  the  Textile  Com- 
mittee's office,  was  rung  up  by  Shri  N,  K.  Singh,  Spe- 
cial Assistant  to  the -then  "Commerce  Minister,  Shri 
D.  P.  Chattopadhyaya,  requiring  Shri  Suri  to  furnish 
urgently  the  addresses  and  dates  of  posting  of  all  the 
inspecting  staff  in  the  Textile  Committee.  Shri  Suri 
has  stated  before  the  Commission  that  Shri  N,  K. 
Singh  had  told  him  that  he  would  be  token  to  task  if 
the  information  asked  for  by  Shri  N,  K.  Singh  was  not' 
furnished  Eo  him  within  half  an  hour. 

7.110  Shri  N.  K.  Singh  has  stated  that  he  had  asked 
for  a  list  of  names  of  the  Textile  Inspectors  on  an 
urgent  basis  from  Shri  Suri,  who,  he  had  been  told, 
would  be  the  right  person  to  collect  and  furnish  thef 
information  on  a  priori  ty  basis.  This  information  was 
required  by  him  as,  earlier' to  that,  Shri  R.  K.  Dhawan, 
Additional  Private  Secretary  to  the  Prime  Minister, 
or  Shri  V.  Ramachandran,  Joint  Secretary  in  the 
Prime  Ministers  Secretariat,  had  rung  him  up  asking 
for  a  list  of  the  Textile  Inspectors  as  it  had  been  com- 
plained to  the  Prime  Minister  that  Shri  D.  P.  Chatto- 
padhyaya, the  Minister,  was  showing  special  favours 
to  the  Bengalees.  He  had  brought  this  allegation1  to 
the  notice  of  the  Minister  who  had  told  him  to  collect 
the  information  and  pass  it  on  to  the  Prime  Minister's 
Secretariat.  The  information  was  furnished  bv  .Shri 
Suri  to  Shri  N.  K.  Singh,  who  in  turn  passed  it  on'  to 
Shri  R.  K.  Dhawan.  Shri  N.  K.  Singh  has  also  stated 
that  he  had  been  told'  by  either  Shri  R.  K.  Dhawan 
or  Shri  V.  Ramachandran  that  the  information  was  rc- 
cmired  bv  the  Prime  Minister.  Shri  R.  K.  Dhawan 
has  stated  that  he  had  rung  up  Shri  N.  K.  Singh  and' 
conveved  to  him  the  information  that  had  come  to  the 
notice  of  the  Prime  Minister  regarding  the  alleged 
nepotism  pf  the  Minister.  Shri  D.  P.  Chattooadhyava. 
Shri  Dhawan  denies  that  he  had  mentioned  to  Shri 
N.  K.  Singh  that  the  matter  was  urgent.  The  question 
of  asking  for  the  list  itself  had  arisen  out  of  the 
discussion  that  he  had  with  Shri  N.  K.  Singh.  Later 
he  had  received  some  unsigned  list,  giving  the  names 
of  certain  officials  in  the  Textile  Department,  giving 
the  dates  of  appointment  and  their  other  particulars; 
Shri  Dhawan  had  shown  the  list  to  the  Prime  Minister! 
According  to  Shri  Dhawan.  the  list  of  names  was  given 
by  him  to  Smt.  Gandhi  and  it  remained  with  her. 

7.111  Shri  A.  P.  Mukhertee,  DIG,  CBI,  has  stated 
before  the  Commission  that  some  time  towards  the 
end  of  Mav.  1976.  Shri  P.  S.  Blunder,  the  then  DIG 
(Range)  of  Delhi  Police  had  informed  him  that    he 


rtt!-;&2T<&V~-X?™:   .-'.:  ."^■.:-''""': 


65 


had  received  some  information  from  the  Prime  Minis- 
ter's House  about  corruption  and  harassment  by  some 
officers  of  Excise/Customs/Export  Promotion  Council 
in  the  matter  of  export  of  garments  by  various  expor- 
ters.  Shri  Mukherjee  had  told  Shri  Bhinder  that  the 
Delhi  Branch  of  CBI  had  no  information  on  the  sub- 
ject. Thereafter  he  set  about  collecting  whatever 
information  was  possible  on  the  subject  through  its 
.officers.  Even  before  Shri  A.  P.  Mukherjee  could 
cellect  any  worthwhile  information  on  which  any  action 
could  be  contemplated,  he  came  to  know  that  12 
officers  of  the  Textile  Committee/Customs  had  been 
arrested  under  MISA  by  the  Delhi  Police,  Thereafter, 
he  discontinued  his-  efforts  to  compile  any  further 
information  on  the  subject. 

'  7.112  According  to  Shri  Blunder's  testimony  before 
the  Commission,  he  had  spoken  to  Shri  A.  P.  Mukher- 
jee, DIG,  CBI  but  had  not  mentioned  to  him  that 
the  information  had  originated  from  P.M.'s  House. 
There  is  no  reason  why  Shri  A,  P.  Mukherjee  should 
have  said  that  Shri  Bhinder  had  told  him  that  the 
information  had  originated  from  the  P.M.'s  house  if  in 
fact  Shri  Bhinder  had  not  told  him  so.  Shri  Mukher- 
jee was  not  in  any  way  connected  with  any  of  the 
transactions  regarding  arrests  of  the  officers  concerned 
which  subsequently  followed  and  he  was  in  no 
need  of  any  excuse  to  drop  names  to  cover  his  doings. 
Shri  Bhinder  has  stated  that  he  had  got  the  information 
from  exporters  about  the  corruption  indulged  in  by 
the  Textile/Customs  Officers.  In  the  course  of  his 
examination  by  the  Commission,  however,  he  could 
not  name  the  person  who  had  given  him  this  informa- 
tion, nor  had    he  kept  any  record  of  the  information. 

.  7.113  The  subject  of  dealing  with  the  corrupt  offi- 
cers generally  under  MISA  had,  it  appears,  been  discus- 
sed by  Shri  Bhinder  with  the  senior  officers  of  the 
Delhi  Administration  and  a  policy  decision  to  that 
effect  had  also  been  taken.  According  to  him,  he 
had  told  Shri  Balwant  Singh,  SP  (Anti-Corruption) 
of  the  Delhi  Administration  to  collect  the  list  of  names 
of  officers  indulging  in  corruption  and  Shri  Balwant 
Singh  had  furnished  him  that  list,  which  formed  the 
basis  for  action  that  was  subsequently  taken  against 
the  officers.  Shri  Balwant  Singh  in  his  statement  before 
the  Commission  however,  denied  having  furnished  any 
such  list  of  corrupt  officers  to  Shri  Bhinder,  though 
Shri  Balwant  Singh  had  said  that  at  the  instance  of 
Shri  Blunder  he  had  detailed  his  officers  to  associate 
with  the  CBT  officers  in  interrogating  the  Textile/Cus- 
toms officers  who  had  been  earlier  arrested  by  the 
Delhi  Police  under  sections  108/151  Cr.  P.C.  and 
later  on  detained  under  MISA.  Shri  Bhinder  has 
tried  to  deny  that  the  arrest  of  the  Textile/Customs 
officers  oh  fabricated  grounds  under  sections'  10S/151 
Cr.  P.  C.  was  done  at  his  instance,  though  the  SPs. 
particularly  Shri  R.  K.  Ohri,  Superintendent  of  Police 
(Central  District),  have  categorically  stated  that  instruc- 
tions for  these  arrests  originated  from  Shri  Bhinder. 

7.114  Smt.  Shailaja  Chandra  has  stated  before  the 
Commission  that  though  the  subject  of  arresting  gene- 
rally the  corrupt  officials  under  MISA  had  probably 
been  discussed  in  the  Apex  Committee  meeting,  still 
the  decision  was  intended  to  be  applicable  only  to  the 
S/39  HA/77— 10. 


officials  of  the  Delhi  Administration  and  not  to  the 
Central  Government  employees.  In  the  present  case, 
all  the  employees  were  Central  Government  employees. 

7.115  Delhi  Police  struck  in  the  first  week  of  June, 
1976.  The  concerned  Superintendents  of  Police  were 
supplied  the  names  of  the  officers  of  the  Textile  Com- 
mittee/Customs by  Shri  Bhinder  who  ordered  their 
immediate  arrest  and  detention  under  MISA  because 
they  were  indulging  in  corrupt  practices  and  anti- 
Government  activities.  The  SPs  were  also  informed 
that  District  Magistrate  will  give  instructions  to  .the 
concerned  ADMs  for  issuing  the  detention  orders  under 
MISA,  and  that  in  the  meantime  "in  accordance  with 
the  prevalent  practice"  the  officers  should  be  arrested 
under  the  preventive  sections  of  the  Criminal  Procedure 
Code  so  that  they  did  not  evade  arrest  by  going  under- 
ground. The  SPs  passed  on  the  orders  to  their  SHOs 
after  confirming  with  the  concerned  ADMs  and  the 
arrests,  followed.  The  ADMs  who  had  issued  the 
MISA  detention  orders  have  all  said  in  their  state- 
ments that  they  issued  the  detention  orders  merely 
on  the  directions  of  the  District  Magistrate. 

7.116  Customs  Inspectors  Yadav  and  Malik  were 
picked  up  from  their  office  in  the  afternoon  of  June  1, 
1976,  by  the  Police  on  some  false  pretext  and  locked 
up.  Textile  Inspectors  Walia,"Bhambri,  Rangaraja  and 
Asstt.  Inspecting  Officer  Chatterjee,  were  whisked  away 
from  their  homes  in  the  late  hours  of  night  on  the  same 
day.  The  other  Inspectors  Ghosh,  Gupta,  Venkatesh, 
Chakravorty,  Jain  and  Mukherjee  were  arrested  sub- 
sequently at  the  convenience  of  the  Police  between 
2-6-76  and  5-6-76. 

7.117  Shri  Bhinder  has  admitted  before  the  Com- 
mission that  he  had  not  obtained  the  permission  of  the 
concerned  Ministries  before  arresting  these  officers. 

7.118  All  these  officers  were  initially  arrested  under 
the  preventive  sections  of  Criminal  Procedure  Code 
(108/151)  on  false  and  fabricated  allegations.  Ins- 
pector Yadav  and  Inspector  Malik  who  were  arrested 
from  their  office  premises  were  alleged  to  have  raised 
slogans  protesting  against  the  Emergency  and  were 
plotting  to  overthrow  the  Government.  Inspector 
Bhambri  was  charged  with  instigating  the  people  against 
the  Government  in  a  public  speech  allegedly  made  at 
5.30  in  the  morning  on  June  2,  1976  in  Ajmal  Khan 
Park,  while  actually  he  was  picked  up  from  his  house, 
earlier  at  12.30  at  night  and.  locked  up  at  the  police 
station.  The  other  Inspectors  were  also  arrested  on 
similar  false  allegations* 

7.119  All  these  respectable  Government  officers 
were  handcuffed  by  the  police  while  being  taken  to  the 
Court  or  to  the  Jail.  Some  of  them  were  made  to 
travel  in  the  public  buses  where  they  were  seen  by 
general  public.  After  a  mechanical  production  before 
the  Magistrate  where  none  of  them  was  given  a  hear- 
ing or  offered  bail,  they  were  sent  to  Tihar  Jail.  With- 
in a  few  days  of  their  arrest,  the  detention  orders  under 
MIS  A  were  duly  served  on  them'  at  Tihar  Jail.  The 
grounds  of  detention  in  the  MISA  orders  in  respect  of 
the  Textile     Committee  officers     were  that  "in     the 


course  of  inspection  of  textile  material  meant  for  ex- 
port, the  officers  were  showing  undue  favour  to  the  ex- 
porters by  stamping  the  sub-standard  textile  for  export 
to  foreign  countries  which  is  bringing  bad  name  to  the 
country"  and  also  that  the  officers  "have  been  indulging 
in  malpractices  and  acting  against  the  national  interest". 
In  respect  of  the  Custom  Officers  the  grounds  of  deten- 
tion were  that  they  were  "conducting  themselves  in  a 
manner  prejudicial  to  the  maintenance  of  public  order 
while  working  as  Inspectors  in  the  Air  Cargo  Unit  of 
Palam  Airport."  The  charges  under  sections  108/ 
151  Cr.  P.C.  on  the  basis  of  which  these  officers  were 
initially  arrested  were  subsequently  dropped  in  view 
of  their  detention  under  M1SA. 

7.120  A  meeting  took  place  between  Shri  D.  Sen, 
Director,  CBI,  and  Shri  Blunder,  in  the  office  of  the 
CBI  after  the  arrest  of  the  Textile/Customs  officers. 
At  this  meeting,  Shri  Bhinder  is  reported  to  have  said 
that  he  was  100%  satisfied  that  these  officers  were 
corrupt.  According  to  Shri  Sen,  he  came  to  know 
about  the  arrests  of  the  officers  when  the  annoyance 
of  the  Commerce  Minister  was  conveyed  to  him  by 
someone  whom  he  does  not  remember.  After  he 
heard  from  the  Delhi  Police  or  from  the  Commerce 
Ministry  about  the  arrest  of  these  officers,  the  CBI 
decided  to  move  in  the  matter  since  there  were  also 
charges  of  corruption  against  them.  He  had  directed 
Shri  Rajpal  to  collect  whatever  intelligence  was  avail- 
able regarding  corruption  against  these  officers.  Ac- 
cording to  him  he  left  it  to  Shri  A.  B.  Cfraudhary, 
Joint  Director,  to  take  appropriate  action  after  the 
collection  of  the  required  information  against  the  con- 
cerned officials. 

7.121  A  perusal  of  the  CBI  file  makes  a  very  dist- 
ressing reading.  At  the  instance  of  the  Director, 
CBI,  the  CBI  officials  moved  into  action  in  an 
effort  to  collect  information  against  the  officials  to 
substantiate  the  charge  of  corruption  against  them. 
Shri  Y.  Rajpal,  D.I.G.  in-charge  of  the  Intelligence 
Unit  of  the  CBI  has  stated  that  it  was  obvious  to  him 
that  Shri  Sen  had  already  made  up  his  mind  to  regis- 
ter cases.  In  the  process  a  couple  of  CBI  officers 
associated  themselves  with  the  S.P.-  (Anti-Corruption) 
of  Delhi  Administration  and  interrogated  the  arrested 
officers  in  the  Tihar  Jail.  Separately  their  houses 
were  also  kept  under  watch.  As  a  result  of  all  these 
efforts,-  some  information  was  obtained  against  only 
four  of  the  arrested  officers  about  their  having  certain 
assets.  No  effort  was,  however,  made  to  ascertain 
whether  or  not  these  assets  were  in  fact  disproportion- 
ate to  the  known  sources  of  their  income.  It  does 
not  appear  from  the  record  that  any  inquiries  were 
made  to  ascertain  whether  the  officers  who  had  declar- 
ed ceitain  assets  had  come  by  those  assets  through 
sources  other  than  their  pay.  On  the  basis  of  the 
perfunctory  efforts  made  by  the  CBI  officials,  regular 
cases  under  the  Prevention  of  Corruption  Act  were 
registered  aeainst  four  officials,  namely  Shri  S.  N, 
Chatteriee.  Shri  Asntosh  Mukheriee.  Shri  S.  S.  Yadav 
and  Shri  M.  S.  Malik.  Almost  identical  FIRs  were 
registered  against  each  of  these  four  officers  and  their 
houses  were  searched.  Thev  did  not  even  spare  the 
house  of  the  son-in-law  of  Shri  Malik  whose  house 
was  also  searched  by  CBI,    The  searches  revealed 


nothing.  Suffice  it  to  say  that  after  all  the  investiga- 
tion that  followed,  the  CBI  had  to  drop  all  the  four 
cases  started  against  these  four  officers  under  the  Prer . 
vention  of  Corruption  Act.  But  in  die  meantime  the 
CBI  under  Shri  D.  Sen  had  done  irreparable  damage 
to  these  officers  for  no  fault  of  theirs. 

7.122  Director  CBI,  Shri  D.  Sen,  showed  extra 
keenness  to  register  cases  against  these  four  officers, 
though  the  material  available  on  record  did  not  war- 
rant the  action  that  followed.  On  the  other  hand,  when 
it  came  to  dealing  with  Shri  Bhatnagar  and  Shri  Sun, 
Shri  Sen  adopted  a  different  yardstick.  Shri  R.  K. 
Gupta.  S. P.  and  his  DIG  Slid  Rajpal  were  persistent  in 
their  suggestion  to  Shri  Sen  that  the  material  available 
on  their  record  warranted  action  against  them.  Shri 
Sen  evaded  the  issue  by  asking  for  yet  more  material, 
and  eventually  Shri  D.  Sen  decided  that  the  material 
collected  against  them  be  forwarded  to  the  Department 
concerned  for  appropriate  action. 

7.123  The  Commission  cannot  help  feeling  that 
Shri  D.  Sen  applied  invidiously  different  standards  in 
dealing  with  the  two  sets  of  officers. 

7.124  The  relations  of  some  of  the  detained  officers 
ran  from  pillar  to  post  in  an  effort  to  secure  the 
release  of  the  officers.  In  the  process,  they  knocked 
at  the  doors  of  the  Commerce  Minister,  Shri  D,  P. 
Chattopadhyaya,  Shri  N.  K.  Singh,  the  Special  Assist- 
ant to  the  Commerce  Minister,  Shri  Bhinder  and  the 
Prime  Minister.  Shri  D.  P.  Chattopadhyaya  has 
stated  that  he  felt  very  bad  about  the  whole  thing  and 
yet  felt  helpless  in  the  prevailing  circumstances.  In  his 
statement  before  the  Commission  he  had  said  that  there 
was  an  element  of  competition  between  the  Delhi  Ad- 
ministration and  CBI  to  take  the  laurels  for  these  un- ' 
justified  detentions.  Shri  Qadam  Singh,  who  is 
one  of  the  relations  of  Shri  Yadav,  had  even  ventured 
and  gone  to  meet  Shri  Sanjay  Gandhi  in  the  Maruti 
Factory  in  an  effort  to  get  Shri  Yadav  released,  but 
Shri  Sanjay  Gandhi  is  reported  to  have  told  him  that 
he  deserved  to  be  taught  a  lesson. 

7.125  Shri  S.  M.  Vohra,  one  of  the  Custom 
officials  who  had  known  Shri  Bhinder,  had  also  met 
Shri  Bhinder  in  an  effort  to  get  the  officers  released. 
S'h.  Bhinder  at  that  time  is  reported  to  have  told 
Sh.  Vohra  that  only  Sanjay  Gandhi  could  help  in  the 
matter  as  he  was  annoyed  over  the  objections  made 
by  Shri  Yadav  in  relation  to  the  consignment  of 
exports  by  his  mother-in-law. 

7.126  Shri  S.  K.  Walia's  release  was  secured  some 
time  in  September  and  it  appears,  on  the  admission 
of  Shri  R.  K.  Dhawan  in  the  course  of  his  statement 
that  Shri  Walia  is  one  of  his  relations.- 

7.127  The  matter  regarding  the  release  of  the 
arrested  officers  had  come  up  before  the  Screening 
Committee  of  the  Delhi  Administration.  Shri  Krishan 
Chand  in  his  statement  has  said  that  the  cases  of  the 
Taxtile/Customs  officers  were  placed  before  him  in 
the  Screening  Committee.  Pie  admits  that  in  the 
meeting  held  on  16th  November,  1976,  Shri  Bhinder 
told  him  that  he  would  like  to  speak  to  him  separately 
regarding  these  cases  before  any  decision  is  taken, 


.      TVjl^^Ml^fcJltf^AB 


.         I  _„ 


67 


Accordingly,  both  Shri  Bhinder  and  Shri  Krishan 
Chand  had  adjourned  to  the  ante-room  where 
Sh.  Bhinder  told  him  that  the  release  of  t'hese  officers 
was  not  to -be  considered  as  "these  were  the  orders 
from  the  higher-ups".  Slui  Krishan  Chand  has  said 
that  he  had  understood  "higher-ups"  to  .  mean 
Sh.  Saujay  Gandhi,  That  Sh.  Bhinder  and  Sh.  Krishan 
Chand  had  a  word  with  each- other  separately  at  the 
time  of  the  Screening  Committee  meeting  is  also  borne 
out  by  Shri  T.  R.  Kalia,  Deputy  Secretary,  Home, 
Delhi  Administration,  who  was  present  in  that 
meeting.  Shri  Bhinder  in  his  statement  has,  however, 
said  that  he  had  spoken  to.  Sh.  Krishan  Chand 
mentioning  that  he-  should  consult  Sh.  Om  Mehta 
before  deciding  to  release  the  inspectors.  He, 
however,  denies  having  told  Shri  Krishan  Chand  about 
the  orders  from  the  "higher-ups". 

7.128  The  story  of  the  arrest  and  detention  of  the 
Textile  Inspectors  makes  a  very  sad  reading.  Going 
entirely  by  the  facts  available  on  record,  it  has  no- 
where been  established  that  tiiese  officers  were  corrupt 
or  had  done  anything  which  could  even  distantly  be 
interpreted  as  improper  or  incorrect.  On  the  contrary, 
some  of  them  had  acted  courageously  and  correctly 
in  the  discharge  of-  their  .-duties  and  this  proved  to  be 
their  undoing.  In  ;thfe'  process  they  had  antagonised 
the  proprietors  £&.'  M  s.  jhdira  International  whose 
financial  interest  with-:Kie  mother-in-law  of  Sh.  Sanjay 
Gandhi  stands  proved  on-  the  basis  of  documentary 
evidence.  The  relevant  income  tax  records  of 
Smt.  Anteshwar  Anand,  mother-in-law  of  Sh.  Sanjay 
Gandhi  were  produced  before  the  Commission,  on  the 
basis-  of  whicjb.  it  is  fully  and  completely  established 
that  Smt.  Anteshwar  Anand  had  considerable 
.  financial  interest  in  the  firm  M/s.  Indira  International. 
In  the  year  ending  31st  March,  1976  and  31st  March, 
1977,  substantial  amounts  had  been  received  by 
Smt.  Anand  from  M/s.  Indira  International  as 
commission,  as  proved  by  the  Income-Tax  Returns 
of  Smt.  Anteshwar  Anand,  produced  before  the 
Commission  by  the  Income  Tax  Officer, 

7,129  The  list  of  the  Textile  Inspectors'  was 
obtained  by  Shri  N,  K.  Singh  at  the  instance  of 
Shri  R.  K.  Dhawan  and  the  list  was  passed  on  by 
Sh.  N.  K.  Singh  to  Sh.  R.  K.  Dhawan,  who  in  turn 
had  passed  it  on  to  Smt.  Gandhi.  The  contention 
that  the  list  of  Textile  Inspectors  was  required  only 
to-  check  or  verify  the  allegation  regarding  nepotism 
by  Sh.  D.  P.  Chattopadhayayti  with  regard  to  Textile 
Inspectors  does  not  appear  to  be  correct.  If  this  list 
was  required  only  for  deciding  the  issue  with  regard 
to  the  allegation  of  nepotism  against  Sh.  D.  P.  Chatto- 
padhayaya,  how  could  this  conclusion  be  arrived 
at  correctly  by  obtaining  only  the  list  of  Textile 
Inspectors — a  small  group  of  officers  in  a  Ministry 
which  has  hundreds  of  other  employees  distributed 
over  a  large  number-  ot  Departments.  It  appears  that 
the  list  furnished  by  Sh.  N.  K.  Singh  to  Sh.  Dhawan 
was  given  to  Smt.  Gandhi,  and  from  Smt.  Gandhi  it 
appears  to  have  gone  to  Sh.  Bhinder  who  thereafter 
cracked  down  on  a  few-  selected  officers.  The 
contention  of  Sh.  Bhinder  that  he  got  the  list  from 
Sh.  Balwant  Singh  is  not  tenable  as  this  does  not 
explain  how  he  got  within  that  list,  the  names,  of  just 


the  two  Customs  Officers  who  happened  to  have 
antagonised  M/s.  Indira  International.  Shri  Balwant 
Singh  himself  lias  denied  having  furnished  any  list  to 
Sh.   Bhinder. 

7.130  Sh.  Bhinder  on  his  own  admission  has  been 
the  prime  mover  in  the  sordid  story  o'f  these  arrests 
and  detentions. 

7.131  After  the  preliminary   stage  of  hearing   in 

this  case,  the  Commission  had  given  a  notice  under 
Rule  5(2)  (a)  of  the  Commissions  of  Inquiry  Rules 
and  summons  under  section  SB  to  Smt.  Indira, 
Gandhi,  Sh.  D.  Sen,  Sh,  R.  K.  Dhawan,  Sh.  P.  S. 
Bhinder,  Sh.  N,  K.  Singh  and  Sh.  Balwant  Singh. 
Smt,  Gandhi  (hough  she  responded  to  the  summons, 
did  not  submit  her  statement  as  required  under 
Rule  5(2)  (a)  and  also  refused  to  be  examined  on 
oath.  The  remaining  four  had  responded  to  the 
notice  and  the  summons.  The  Commission-has  taken 
into  account  the  versions  o£  Sh.  N,  K.  Singh, 
Sh.  Balwant  Singh  and  Sh.  R.  K,  Dhawan.  The 
Commission  is  satisfied  that  they  had  played  a  very 
,  limited  role  each  in-  their  respective  fields  and  they 
cannot  be  held  responsible  for  the  arrest  and  detention 
that  followed  nor  for  the  CBI  cases  that  were  mooted 
against  four  of  these  officers. 

7.132  Regarding  Shri  D.  Sen  and  Sh.  P.  S.  Bhinder, 
the  Commission,  before  coming  to  its  conclusion  on 
the  part  played  by  them,  has  taken  into  account  their 
written  statements  as  also  the  evidence  brought  on 
record  by  the  statement  of  witnesses  whom  they  had 
examined  and  also  chosen  to  cross-examine. 

7.133  Shri  D.  Sen  appears  td  have  lent  -himself 
and  his  organisation  for  purposes  other  than  those 
which  are  strictly  within  the  terms  of  the  charter  of 
the  CBI.  It  cannot  otherwise  be  understood  how 
he  could  have  mounted  the  cases  of  corruption  against 
the  four  officials,  searched  their  houses  including  the 
house  of  the  son-in-law  of  one  of  the  officers,  unless 
it  was  at  the  instance  of  Shri  Bhinder.  The  entire 
action  by  the  CBI  under  Shri  D.  Sen  was  initiated  on 
grounds,  which  were  totally  inadequate  and 
imaginary.  As  against  this,  he  let  off  without  any 
action  two  officials  against  whom  there  was  adequate 
material  to  warrant  prosecution  under  the  Prevention 
of  Corruption  Act.  He  has  grossly  misused  his 
position  as  the  Director,  CBI,  and  abused  his 
authority. 

7.134  The  Commission  feels  that  Smt.  Gandhi  has 
abused  her  authority  and  misused  her  power  in  having 
caused  the  arrest  and  detention  of  these  12  officers 
without  adequate  justification  and  using  the  CBI  to 
set  in  motion  criminal  cases  against  four  of  them,  all 
of  which  had  to  be  abandoned  eventually  for  want  of 
any  material, 

7.135  Shri  Bhinder  has  been  the  hatchetman  and 
he  went  about  the  arrest  and  detention  of  these 
officers  without  any  justification  whatever.  He  was 
also  ''responsible  along  with  Shri  D.  Sen  to  get  the 
CBI  to  register  cases  against  four  of  these  officials, 
He  has  grossly  abused  his  authority  and  misused  his 
power. 


68 


10.  Misuse  of  powers  and  miscarriage  of  justice  in 
saving  Shri  Sudarshan  Kumar  Verma,  a  clerk  in 
the  Railways,  from  legal  punishment  by  the  CBI 
officials. 

7.136  On  information  furnished  by  Sh.  Gopal  Das, 
a  loco-shed  man,  that  Shri  Sudarshan  Kumar,  a  clerk 
employed  by  the  Northern  Railway  was  demanding 
illegal  gratification  as  consideration  for  fixing  the  scale 
of  pay  of  Shri  Gopal  Das,  a  case  was  registered  and 
arrangements  were  made  by  the  CBI  Delhi  Branch, 
to  trap  Shri  Sudarshan  Kumar  when  receiving  the 
bribe.  Shri  Sudarshan  Kumar  was  caught  in  the 
actual  process  of  demanding  and  receiving  bribe. 

7.137  Shri  Verma  appears  to  have  had  access  to 
the  Prime  Minister's  household  and  he  got  in  touch 
with  his  contact. 

7.138  Shri  D.  Sen,  the  Director  of  CBI  was  asked 
by  some  one  from  the  Prime  Minister's  house  to  look 
into  the  case. 

7.139  A  complaint  was  lodged  and  investigation 
was  completed.  Prosecution  of  Shri  Verma  under 
section  161  of  the  Indian  Penal  Code  and  section  5(2) 
read  with  section  5(1)  (d)  of  the  Prevention  of 
Corruption  Act  was  sent  to  the  Vigilance  Officer, 
Northern  Railway  on  January  31,  1976. 

7.140  Normally,  the  Director  of  CBI  handles 
important  cases  dealing  with  high  officers,  whereas 
cases  involving  non-Gazetted  officials  are  dealt  with 
at  the  Branch  level  and  neither  the  Director  nor  the 
Joint  Director  is  concerned  with  such  cases.  But,  in 
this  case,  shortly  after  the  case  against  Shri  Verma 
was  registered,  the  Director,  CBI,  Shri  Sen'  called 
Shri  A.  P.  Mukherjee,  DIG,  CBI,  Delhi  Branch  and 
called  for  the  case  papers. 

7.141  After  the  recommendation  regarding'  the 
prosecution  of  Shri  Verma  had  been  sent,  the  Director 
desired  that  the  case  should  be  examined  once  again. 
Thereafter,  the  DIG  discussed  the  feasibility  of  getting- 
back  the  SP's  report  from  the  F„ailway  Department. 
A  Superintendent  of  Police  was  sent  to  the  Railways 
to  contact  Shri  Prasad  and  Shri  Dayal  of  the  Railways 
to  retrieve  the  report  but  his  attempts  were  unsuccess- 
ful. 

7.142  After  they  failed  to  retrieve  the  report  from 
the  Railways,  Shri  Verma  submitted  a  representation 
some  time  in  September,  1976,  to  Shri  Sen  with  a 
request  that  the  case  should  be  reconsidered.  Shri  Sen 
then  desired  that  the  Delhi  Branch  should  send  the 
comments  on  the  representation  and  these  comments 
should  be  sent  to  him  through  the  Joint  Director, 
Shri  A.  B,  Choudhary.  Shri  A.  P.  Mukherjee  of 
Delhi  Branch  sent  his  comments  on  the  representa- 
tion of  Shri  Verma,  He  was  of  the  view  that  there 
was  no  substance  in  the  representation.  Shri  A.  P. 
Mukherjee  had  taken  a  courageous  stand  even  at  this 
stage  when  he  should  have  been  in  no  doubt  about 
what  his  superior  officer  desired.  Comments  were 
put  up  by  the  Delhi  Branch  and  on  September  9, 
1976,  Shri  Choudhary  called  the  DIG  to  come  and 
see  him  with  the  case  records.    This  was  accordingly 


done  by-  Shri  Mukherjee.  The  case  was  discussed 
and  it  was  ultimately  decided  that  a  Junior  Law 
Officer  should  examine  the  representation  and  give 
his  views.  Thereafter,  the  matter  was  sent  to 
Shri  Jamuar,  who  gave  his  comments  first  finding  that 
there  was  no  substance  in  the  points  raised  by 
Shri  Verma,  and  also  that  the  representation  could 
make  no  impact  on  the  prosecution  case  in  a  court 
of  law.  But  he  suggested  that  certain  circumstances 
might  be  relied  upon  by  Shri  Verma  at  the  trial  and, 
therefore,  there  was  justification  for  reconsideration 
of  the  case.  It  was  mentioned  by  Shri  Jamuar  that 
at  the  time  of  the  trap  the  independent  witness,  who 
had  seen  the  acceptance  of  the  bribe  and  had  over- 
heard the  conversation,  was  with  the  CBI  Inspector, 
and,  therefore,  Shri  Verma  could  take  the  plea  that 
the  independent  eye-witness  was  under  pressure  cf 
the  police  officer.  He  also  suggested  that  at  the  time 
of  the  search  of  Shri  Verma,  a  pronote  for  Rs.  3,300 
was  recovered  from  his  person  and  that 
that  Shri  Verma  may  take  a  plea  that  the  loanee  had 
returned  a  part  of  the  amount  through  the  decoy. 
These  contentions  were  not  raised  by  any  one  any 
time  prior  to  the  report  made  by  Shri  Jamuar. 
Shri  Jamuar  suggested  that  the  -  evidence  should  be 
evaluated  through  a  departmental  enquiry  first  to 
know  all  probable  explanations  of  the  accused  before 
he  was  sent  for  trial.  Shri  A.  B.  Choudhary  agreed 
with  the  comments  or  Shri  Jamuar  and  endorsed  the 
recommendation  that  the  case  should  be  sent  fur 
departmental  action  first. 

7.143  On    September    9,     1976,    Shri    Sen,    the 
Director,    agreed   with   Shri   Choudhary's  suggestions 
and  orders  were  issued  to  the  Delhi  Branch  for  taking., 
further  necessary  action. 

7.144  A  fresh  attempt  was  made  by  she  SP  Delhi 
Branch  to  retrieve  the  SP's  reports  from  the  Railways, 
The  Railway  Authorities  on  receipt  of  the  request  in 
writing  handed  over  the  SP's  reports.  Thereafter,  a 
fresh  report  was  prepared  recommending  departmental  . 
action  against  Shri  Verma  and  was  sent  to  the  Railway 
Authorities. 

7.145  The  circumstances  of  the  case  and  the 
evidence  given  by  Shri  Sen  leave  little  room  for  doubt 
that  someone  from  the  Prime  Minister's  household 
contacted  Shri  D.  Sen  and  asked  him  to  so  arrange 
that  Shri  Verma  was  not  prosecuted.  Accordingly, 
contrary  to  the  normal  procedure,  adopted  in  similar 
cases,  Shri  D.  Sen  himself  called  for  the  papers, 
attempted  through  his  subordinates  to  retrieve  reports 
from  the  Railways  and  having  failed  to  do  so, 
suggested  a  different  line  of  action  according  to  which 
Shri  Verma  should  be  dealt  with  departmentally.  The 
evidence  of  Shri  Mukherjee  and  the  Vigilance  Officer 
of  the  Railways,  in  the  light  of  the  attempts  made  to 
retrieve  the  report  from  the  Railways  leave  little 
room  for  doubt,  that  this  was  not  a  case  in  which, 
according  to  the  accepted  procedure,  departmental 
inquiry  should  have  been  ordered.  But  it  was 
because  of  pressure  from  above  that  Shri  Verma  was 
not  prosecuted  and  various  steps  were  taken. 

Mr.  D.  Sen  was  given  a  notice  under  rule  5(2)  (a) 
of  the  Rules  and  served  with  a  summons  under  section 


-**m*?i>siaia£1SEKsS2!SSE52ttesEi "  !'l i*A  l ;.-^ii... :.,-/.  Is. 


69 


8B  of  the  Act.  He  submitted  a  statement  and  also 
responded  to  the  summons.  His  statement  of  defence 
has  been  taken  into  account. 

7.146  It  is  ..not- possible- to  say  as  to  who  from 
the  Prime  Minister's  Secretariat  or  Household  brought 
pressure  upon  Shri  D.  Sen.  and  reminded  him 
subsequently.  Shri  D.  Sen  has'  stated  that  he  met 
Shri  Verma  in  the  morning  Durbar  at  the  house  of 
the  Prime  Minister,  Smt.  Indira  Gandhi,  and  that 
Shri  Verma  made  a  representation.  Shri  D.  Sen 
further  stated  that  because  the  representation  was 
made  to  him  in  the  Prime  Minister's  house,  he  called 
for  the  papers  and  reconsidered  the  matter.  He 
further  stated  that  if  he  did  not  do  so,  he  might  have 
been  taken  to  task  if  the  case  had  failed  in  a  court 
of  law.  Shri  D.  Sen  has  also  stated  in  his  defence 
that  he  had  not  finally  closed  the  prosecution  of  the 
case.  He  had  only  suggested  the  testing  of  the 
evidence  in  a  Departmental  inquiry  and  if  the  evidence 
stood  the  test  of  the  Departmental  inquiry,  the 
authorities  could  always  get  back  to  the  prosecution. 
But  oh  the  evidence  it  is  clear  that  at  the  instance  of 
some  one  from  the  Prime  Minister's  house,  Shri  D. 
Sen  perverted  the  normal  procedure  and  pressurised 
his  subordinate  officers  with  a  view  to  help  Shri  Verma 
from  being  punished  in  a  prosecution  for  an  offence 
under  section  161'  of  the  Indian  Penal  Code  and 
section  5(2).  read  with  section  5(1)  (d)  of  the 
Prevention  of  Corruption  Act.  On  the  materials 
collected  by  the  authorities,  there  was  little  chance 
of  Shri  Verma  escaping  conviction  for  the  offence  of 
receiving  a  bribe. 

-;.'  .7.147  It    is,    therefore,   a  clear    case    in    which .. 
perversion  of  the  normal  process  by  Shri  D.  Sen  and 
misuse  of  power  is  established. 

11.  Deviation  from  established  procedure,  Misuse  of 
Power  and  Abuse  of  Authority  by  Shri    T.  R, 
tuli,  Chairman  of  the  Punjab  National  Bank,  in 
allowing  a  dean    overdraft  to    M/s.  Associated 
Journals  Ltd. 

7.148  On  the  22nd  of  March,  1976,  the  Parliament 
Street  Branch  of  the  Punjab  National  Bank  permitted 
a  clean  overdraft  o'f  Rs.  8,30,000  to  M/s.  Associated 
Journals  Limited,  a  company  which  carries  on  busi- 
ness mainly  as  printers  and  publishers  of  newspapers, 
The  only  short  point  for  consideration  in  this  case  is 
as.,to  whether  this  transaction  was  a  normal  one  in  the 
ordinary  course  of  the  Bank's  business  or  whether  it 
was  entered  into  because  of  collateral  considerations. 
Several  facts  have  been  placed  before  the  Commission 
and  arguments  advanced  in  relation  thereto  which  are 
totally  irrelevant  and  extraneous  to  the  consideration 
of  this  basic  point  and  it  is  not,  therefore,  necessary 
to  discuss  them  here. 

7.149  Briefly,  the  undisputed  facts  are  that  earlv 
in  March  1976,  Shri  T.  R.  Tuli,  the  then  Chairman 

and  Managing  Director  of  Punjab  National  Bank  met 
Shri  P.  C.  Sethi,  the  then  Minister  for  Chemicals  and 
Fertilisers  at  the  Minister's  residence  at  the  la'tter's 


request.  At  this  meeting  Shri  Tuli  was  asked  by  Shri 
Sethi  to  help  Associated  Journals  Limited  by  advanc- 
ing money  to  them  to  enable-  them  t6  take  delivery  of 
certain  items  of  imported  machinery  which  had 
urrived  at  Bombay  and  on  which  Associated  Journals 
had  to  pay  a  considerable  sum  of  money  by  way  of 
customs  duty  and  demurrage  charges.  Thereafter, 
Colonel  Zaidi,  the  then  Chairman  and 
Managing  Director  of  Associated  Journals  Limited 
and  an  Accountant  of  that  Company  met  Shri  T.  R. 
Tuli  in  Shri  Tuli's  office  two  or  three  times  to  explain 
the  requirements  of  Associated  Journals  and  apparent- 
ly also  suggested  that  the  sum  of  money  to  be  imme- 
diately advanced  would  be  paid  off  from  a  term  loan 
of  Rs.  15  [ak'hs  to  be  advanced  by  the  Bank  to  Asso- 
ciated Journals  against  the  security  of  the  secoiid 
mortgage  of  then  building  known  as  "Herald  House" 
on  Bahadur  Shah  Zafar  Marg,  New  Delhi.  Accord- 
ing to  Shri  Tuli's  written  statement  dated  October  22, 
1977,  after  the  discussions,  in  his  office  referred  to 
above,  a  formal  request  was  made  by  Associated 
Journals  to  the  Parliament  Street  Branch  of  this  Bank 
on  March  20,  1976,  requesting  for  the  grant  of  a 
temporary  overdraft  of  Rs.  10  lakhs.  Shri  Tuli  has 
also  added  that  he  had  given  his  verbal  approval  to 
Shri  L.  D.  Adlakha,  Manager,  Parliament  Street 
Branch,  in  this  regard.  In  the  coarse  o'f  his  exami- 
nation before  the  Commission,  Shri  Tuli  could  not 
state  definitely  when  this  verbal  approval  to  the  tran- 
section was  given  but  he  indicated  that  it  must  have 
been  on  the  18*  or  the  l9th  of  March,  1976. 


7.150  Associated  Journals  Limited  did  not  have 
an  account  in  the  Punjab  National  Bank  till  then 
and  they,  therefore,  opened  a  current  account  in  the 
Bank  on  the  20th  and  deposited  a  sum  of  Rs.  1,70,000 
in  that  account.  On  March  22,  a  cheque  for 
Rs.  10  lakhs  was  issued  by  the  Punjab  National  Bank 
to  enable  Associated  Journals  to  have  adequate  funds 
to  pay  the  customs  duty  and  the  demurrage  required  to 
clear  the  machinery  at  Bombay.  Thus,  the  entire 
transaction  resulted  in  a  net  overdraft  of  Rs.  8,30.000 
in  favour  of  Associated  Journals  Limited.  Thereafter, 
there  was  correspondence1  between  the  Parliament 
Street  Branch  of  the  Bank  and  tFie  debtor  company  with 
a  view,  on  the  part  of  the  Bank,  to  ensuring  that  the 
clean  overdraft  already  permitted  was  properly  secur- 
ed. It  is  seen  that  on  the  21st  April,  1976,  Associat- 
ed Journals  wrote  to  the  Punjab  National  Bank  to  the 
effect  that  due  to  some  technical  difficulties,  they  were 
not  in  a  position  to  offer  the  "Herald  House"  as  secu- 
rity and  further  that  they  were  arranging  to  repay  the 
overdraft  within  a  short  period.  It  would  appear  that, 
thereafter  Associated  Journals  were  making  efforts  to 
raise  the  sums  required  to  repay  the  clean  overdraft 
from  the  Punjab  National  Bank  by  offering  "Herald 
House"  as  a  security  by  way  of  second  mortgage  tO'the 
Syndicate  Bank  and  that  for  some  reason  or  the  other, 
they  did  not  in  fact  succeed  in  raising  the  requsite  funds 
and  in  repaying  the  Punjab  National  Bank.  It  would 
appeai-  that  upto  now  they  have  been  able  to  repay 
only  a  sum  of  Rs.  20,000  towards  interest  and  that 
well  over  a  sum  of  Rs.  10  lakhs  by  way  of  principal 
and  interest  is  outstanding  against  Associated  Journals. 


70 


in  the  books  of  the  Punjab  National  Bank.  The  ques- 
tions for  consideration  are  whether — 

(a)  Mr.  T.  R.  Tuli  had  himself  taken  the  deci- 
sion about  allowing  the  clean  overdraft,  or 
whether  he  had  only  approved  a  transaction 
negotiated  and  entered  into  by  the  Branch 
Manager  of  the  Parliament  Street  Branch, 
and 

(b)  If  Shri  Tuli  had  indeed  permitted  the  over- 
draft and  had  been  responsible  for  the  deci- 
sion in  this  regard,  whether  he  had  taken  the 
minimum  necessary  precautions  that  a  pru- 
dent officer  of  the  Bank  should  have  taken, 
in  order  to  ensure  the  interests  of  the  Ban!;. 

In  the  course  of  his  first  testimony  before  the  Com- 
mission on  November  17,  19/7,  Shri  Tuli  was  asked 
Wfietner  the  loan  was  granted  at  his  instance  by  the 
Parliament  Street  Branch  of  his  Bank,  contrary  to  nor- 
mal loan  granting  practice  lonowed  by  the  Bank,  Shri 
Tuli  replied  that  there  was  a  "reason"  for  doing  so  as 
he  had  already  stated  in  his  written  statement  whicii 
had  just  been  read  out }  the  reason  being  Associated 
Journals  Limited  were  in  urgent  need  ot  money  and 
further  that  ultimately  they  were  to  get  a  term  loan 
against  the  mortgage  of  a  building.  In  response  to  a 
further  query  as  to  whether  he  looked  at  the  balance 
sheet  of  the  company,  he  replied  "No  Sir,  not  at  that 
time".  When  asked  why  he  did  not  look  at  the 
balance  sheet,  which  was  certainly  his  duty  as  a 
Banker,  he  replied  "that  was  my  omission",  When 
further  questioned  as  to  why  he  insisted  upon  advanc- 
ing this  sum  of  money  without  any  security,  which  r,e 
was  required  to  take  immediately,  he  replied  that  it 
was  just  by  looking  at  the  urgent  requirements.  When 
asked  whether  his  action  was  because  a  Minister  had 
advised  him  to  help  the  company,  he  replied,  "Yes  Sir, 
that  is  a  big  consideration  for  me".  And  added  that 
"naturally  when  a  Minister  says  some  consideration 
has  got  to  be  given  to  that  and  that  is  why  the  whole 
thing  was  expedited".  The  Commission  reminded 
Shri  Tuli  of  a  portion  in  his  written  statement  wherein 
he  has  stated  that  he  had  given  his  verbal  approval  to 
Shri  Adlakha  and  that  since  National  Herald  publish- 
ed by  Associated  Journals  was  connected  with  the  then 
Prime  Minister,  it  must  have  weighed  a  "little  in  his 
mind  to  deal  with  the  case  on  a  priority  basis  expedi- 
tiously". When  Mr.  Tuli  was  reminded  that  it  was 
without  any  security,  Shri  Tuli  replied  "of  course  it 
was  without  security". 

i  7.151  Shri  Sethi  basically  confirmed  Shri  T.  R.  Tulvs 
version  of  their  meeting  and  the  only  important  point 
that  he  made  was  that  according  to  him  this  request 
was  that  Associated  Journals  should  be  helped  "with- 
in the  frame-work  o'f  the  rules".  He  also  added  that 
at  the  relevant  time  he  had  also,  become  the  Treasurer 
of  the  Congress  and  that  he  would  say  that  he  acted  in 
this  case  in  his  capacity  as  a  Congressman. 

7.152  Shri  Tuli  has  filed  a  voluminous  statement 
in  response  to  the  notice  under  Rule  5(2)  (a)  of  the 
Commissions  of  Inquiry  Rules,  1972,  and  responded 


to  the  summons  u/s  8B  of  the  Act  issued  to  him  in 
this  case.  It  is  not  necessary  to  go  into  the  state- 
ment in  detail  except  to  point  out  mat  Shri  Tuli  has 
sought  to  change  the  stand  originally  taken  by  him 
in  sis  written  statement  dated  October  22,  1977  and 
his  oral  testimony. before  the  Commission  on  Novem- 
ber 17,1977.  Towards  this  objective,  he  has  made 
certain  unwarranted  observations  about  the  Commis- 
sion and  its  investigating  officers  which  I  propose  to 
ignore.  The  main  thrust  of  the  statement  is  that 
Snn  L.  D.  Adlakha,  the  then  Manager  of  the  Parlia- 
ment Street  Branch  of  the  Bank  had  been  associated 
with  the  representatives  of  Associated  Journals  fuom 
the  earlier  stage  and  that  in  fact  that  the  transaction 
had  been  negotiated  and  examined  by  Adlakha  and 
put  up  to  Shri  Tuli  for  approval  and  that  Shri  Tuli 
had  merely  given  his  oral  approval  thereto. 

7.153  Shri  Tali's  statement  at  this  subsequent  stage 
that  Shri  Adlakha  was  associated  in  the  earlier  discus- 
sions which  he  had  with  Col.  Zaidi  and  other  represen- 
tatives of  Associated  Journals  .Limited  does  not  appear 
to  be  correct  as  tnere  is  no  mention  about  that  in  his 
written  statement  dated  October  22,  1977.  Much 
has  b^en  sought  to  be  made  out  both  in  Shri  Tuli's 
statement  dated  January  9,  1978  and  the  argument 
advanced  by  his  Counsel  that  the  entire  correspon- 
dence was  with  the  Manager  of  the  Parliament  Street 
Branch  of  Punjab  National  Bank  and  further  that 
even  the  internal  communications  in  the  Bank  refer- 
red to  that  Branch  as  the  one  which  had  negotiated 
and  entered  into  the  transaction.  In  this  connec- 
tion reference  was  made  to  a  letter  dated  March  20, 

1976,  in  which  Associated  Journals  Limited  mention- 
ed that  they  would  be  grateful  if  the  Bank  could 
kindly  sanction  them  temporary  overdraft  of  Rs.  10 
lakhs. '  This  is  the  very  letter  which  is  referred  to  by 
Shri  Tuli  in  his  written  statement  dated  October  22, 

1977,  as  the  "formal  request"  after  his  discussions, 
which  he  had  had  with  Colonel  Zaidi  and  the  Accoun- 
tant of  Associated  Journals  Limited.  It  is  further 
seen  that  in  another  letter  dated  March  20,  1976, 
addressed  by  Associated  Journals  to  the  Punjab 
National  Bank  they  had  referred  to  the  proposal  as 
"principally,  agreed  to  by  your  Head  Office  authori- 
ties". Similarly,  in  the  Branch  Manager's  letter  dated 
April  8,  1976,  to  the  Head  Office,  he  had  made  it 
quite  clear  that  they  had,  "at  the  Company's  request 
and  under  the  approval  of  our  worthy  Chairman"  per- 
mitted a  clean  overdraft  of  Rs.  8,30,000  on  March  22, 
1976.  Shri  Adlakha's  statement  in  his  affidavit 
dated  October  31,  1977,  that  Shri  Tuli  had  directed 
him  to  grant  a  clean  overdraft  of  Rs.  S,30,000  to 
Associated  Journals  Limited  has  stood  the  test  of 
ci  oss-examination  by  Shri  Tuli's  Counsel.  Even  in 
his  testimony  before  the  Commission  on  January  17, 
1978  in  response  to  the  summons  under  section  8B 
oT  the  Commissions  of  Inquiry  Act,  1952,  Shri  Tuli 
has  confirmed  the  fact  that  the  recommendation  made 
by  Shri  Sethi  and  the  request  made  by  Col.  Zaidi  had 
been  taken  into  account  in  arriving  at  a  decision  in 
this  case,  and  that  the  cumulative  effect  of  all  these 
factors  had  governed  the  approval  of  the  loan.  He 
had  also  conceded  that  there  were  extra-commercial 
considerations  "to  some  extent". 


'--■^^^i^lS^ 


71 


7.15.4  On  the  basis  of  the  evidence  adduced,  there 
can  be  no  doubt  that  the  decision  to  allow  a  tempo- 
rary overdraft  in  this  case  without  any  security ; 
albeit  on  the  understanding  which  did  not  materialise 
that  the  security  will  be  provided  soon  thereafter,  was 
solely  that  of  Shri  T.  R.  Tuli. 


7.155  The.  next  question  is  as  to  whether  he  had 
exercised  the  care  and  caution  expected  of  a  prudent 
person  entering  into  a  transaction  of  this  nature  on 
behalf  of  his  employer.  There  were  several  circum- 
tances  in  this  case  which  should  have  put  'Shri  Tuli 
on-  his  guard: 

(i)  Associated  Journals  Limited  did  not  have 
an  account  with  Punjab  National  Bank  till 
then,  whereas  at  that  time  they  had  four 
Bankers  including  Syndicate  Bank,  United 
.Commercial  Bank  and  Vijaya  Bank  Ltd. 
There  is  nothing  on  record  to  show  that 
Shri  Tuli  either  on  his  own  or  through  any 
of  his  officers  made  any  confidential  en- 
quiry from  the  other  Banks  to  ascertain  (he 
.  credit-worthiness  of  the  party.  On  the 
other  hand,  the  very  fact  that  Associated 
Journals  Limited  had  to  approach  a  Bank 
with  which  they  had  no  prior  dealings  ins- 
tead of  one  of  their  'four  already  existing 
Bankers  was  adequate  enough  reason  to 
suspect  that  not .  everything  was  well  with 
this  proposal. 

',..'/.  (ii)  The  machinery  in  question  had  arrived  m 
Bombay  towards  the  end  of  October  1975, 
and  demurrage  was  being  accumulated'  a! 
the  rate  of  Rs.  4,000  per  day,  it  flavins 
reached  well  over  Rs.  6  lakhs  by  the  time 
the  Punjab  National  Bank  was  approach- 
ed. This  also  should  have  caused  some 
concern  to  Shri  Tuli  as  no  prudent  busi- 
nessman, unless  he  is  in  absolute  distress 
and  unable  to  raise -any  funds,  would  allow 
demurrage  of  this  magnitude  to  add  to  tH_s 
cost  of -his  capital  equipment. 

'  (Hi)  Tn  the  course' of  his  testimony,  Shri  Tuli 
has  confirmed  that  he  had  not  at  the  rele- 
vant time  seen  the  balance  sheet  of  the  com- 
pany or  assessed  its  financial  soundness.  In 
fact,  Shri  Tuli  has  admitted  that  no  evalua- 
tion report  regarding  Associated  Journals, 
nor  their  balance  sheet,  nor  any  statement 
of  their  assets  and  liabilities  had  been  seen 
by  him,  before  he.  approved  this  proposal. 
Tt  is  also  seen  .from  a  report  of  the  Central 
Intelligence  Section  of  the  Credit  Adminis- 
tration of  the  Punjab  National  Bank  that 
Associated  Journals  Limited  had  incurred 
heavy  losses  of  about  Rs.  10  lakhs  per 
year  in  1973-74,  and  1974-75.  that  then- 
accumulated  losses  stood  at  Rs.  47.46  lakhs 
against  paid  up  capital  of  Rs.  51.64  lakhs 
and  some  tied  up  reserves  of  Rs.  6.77  lakhs. 


Thus,  according  to  the  report,  not  only  the 
whole  of  the  reserves  and  surpluses  stood 
wiped  off  but  the.  paid  up  capital  to  the 
extent  of  Rs.  40.69  lakhs  also  stood  erod- 
ed. The  Company  also  had  substantial 
liabilities  both  secured  and  unsecured. 
These  are  matters  which  would  have  be- 
come clear  even  on  the  basis  of  a  cursory 
examination  of  the  company's  last  balance 
sheet  and  subsequent  statements  or  books 
of  accounts.  It  is  clear  that  no  such  exa- 
mination was  made  or  directed  to  be  made 
by  Shri  Tuli  before  he  took  the  decision  in 
this  case. 

7.156  Shri  Dang  appearing  on  behalf  of. Shri  Tuli 
strenuously  urged  that  to  his  knowledge  the  Associat- 
ed Journals  did  own  a  building  in -Delhi  known  as 
'Herald  House'  which  was  of  considerable  value  and 
that  the  ownership  of  this  building  considerably  in- 
fluenced Shri  Tuli  in  granting  a  clean  overdraft  with- 
out insisting  upon  any  security.  It  appears  that  Asso- 
ciated Journals  did  own  the  'Herald  House'.  There 
is  no  clear  evidence  before  the  Commission  as  to  the 
market  value  of  the  building  at  the  date  when  the 
transaction  took  place  nor  about  the  encumbrances  if 
any  outstanding  thereon  and  the  other  liabilities  out- 
standing on  the  date  of  the  transaction.  Whether  the 
bank  may  ultimately  have  been  able  to  recover  the 
whole  or  part  of  the  amount  advanced  by  way  of  a 
clean  overdraft  amount  after  litigation  or  otherwise 
is  not  relevant  for  the  purpose  of  this  enquiry.  The 
building,  it  appears  was  valued  at  cost  and  deprecia- 
tion was  deducted.  The  balance  sheet  did  not  dis- 
close any  ostensible  assets  out  of  which  the  amounts 
advanced  could  be  recovered.  The  bank  advancing 
funds  on  a  clean  overdraft  would  normally  try  to 
ascertain  the  credit-worthiness  of  the  borrower  and 
try  to  ensure  whether  the  amount  advanced  would  be 
repaid  by  the  borrower  on  dema'nd.  This  would  be 
the  minimum  precaution  which  a  banker  could  take 
before  advancing  even  a  small  amount  by  way  of 
clean  overdraft.  In  the  present  case,  however,  no 
precautions  which  would  be  normal  in  advancing 
money  on  clean  .''ioveidraft  account  were  taken  ;  but 
solely  because  of  the  intervention  of  the  Minister 
Shri  P.  C.  Sethi  loan  was  advanced,  disregarding  toe 
cannons  which  would  ordinarily  govern  the  advancing 
of  such  a  loan. 

7.157  For  these  reasons,  the  Commission  is  firmly 
of  the  view  that  Shri  Tuli  who  had  permitted  the  over- 
draft and  was  responsible  for  the  decision  in  this  re- 
gard had  taken  it  without  making  the  minimum  neces- 
sary examination  of  the  facts  of  the  case  and  without 
exercising  a  modicum  of  care  or  caution  and  that  this 
conduct  on  his  part  is  attributable  to  the  fact  that,  he 
was  swayed  by  collateral  considerations.  Thus,  this 
transaction  was  not  a  normal  one  in  the  ordinary 
course  of  the  Bank's  business.  The  Commission  is 
of  the  view  that  Shri  Tuli  had  subverted  established 
procedure  in  permitting  this  overdraft  without  secu- 
rity to  M/s.  Associated  Journals  Limited.  He  has 
also  misused  his  powers  and  abused  his  authority  ill 
so  doing. 


72 


12.  Deviation  from  established  procedure  in  sanction- 
ing facility  by  way  I  of  opening  of  three  foreign 
Letters  of  Credit  by  the  Punjab  National  Bank 
in  favour  of  MJs.  KRSMA  Chemicals  Private 
Limited. 

7.158  On  the  28th  of  September,  1976,  the  Parlia- 
ment Street  Branch  of  the  Punjab  National  Bank  esta- 
blished three  foreign  letters  of  credit  aggregating  to 
Rs.  9,30,000  without  margin  on  behalf  of  M/s. 
KRSMA  Chemicals  Private  Limited  (hereinafter  re- 
ferred to  as  the  Company),  for  the  import  of  certain 
chemicals.  It  would  appear  that  Shri  S.  P.  Mehta, 
since  deceased,  one  of  the  Directors  of  the  Company, 
approached  Shri  T.  R.  Tuli,  the  then  Chairman  and 
Managing  Director  of  the  Bank,  through  the  good 
offices  of  one  Shri  Virender  Kumar  who  was  at  the 
relevant  time  an  Additional  Private  Secretary  to  Shri 
P.  K.  Mukherjee,  the  then  Minister  for  Revenue  and 
Banking.  According  to  Shri  Tuli,  Shri  Kumar  intro- 
duced Shri  S.  P.  Mchta  as  the  father-in-law  of  Shri  Sat 
Mehta,  who  was  a  brother  of  Shri  Om  Mehta,  the 
then  Minister  of  State  for  Home  Affairs.  Incidental- 
ly, Shri  Sat  Mehta  was  one  of  the  major  shareholders 
of  this  Company  at  the  relevant  time,  holding  nearly 
fifty  per  cent  of  the  shares. 

7.159  In  his  statement  dated  November  14,  1977 
Shri  Tuli  has  added  that  : 

"Shri  Kumar  further  requested  me  to  get  three 
Foreign  Letters  of  Credit  opened  without 
,,,■<;?';  any  margin  on  behalf  of  KRSMA  Chemi- 
cals Pvt.  Ltd.  as  the  Company  was  holding 
import  licence.  Since  the  party  was  relat- 
ed to  Shri  Om  Mehta  and  was  brought  by 
Shri  Kumar,  I  asked  the  Regional  Manager 
Shri  D,  P.  Nayyar,  who  incidentally  happen- 
ed to  be  at  the  Head  Office,  to  get  the  need- 
ful done  expeditiously. 

"I  had  no  occasion  to  assess  the  financial  sound- 
ness of  the  Company  or  its  Directors  except 
that  the  Directors  were  highly  connected 
and  as  per  Shri  Kumar,  they  were  very  well 
experienced  in  the  line." 

7.160  Thereupon  Shri  D.  P.  Nayyar  took  Shri  S.  P. 
Mehta  and  his  companion  to  Shri  K.  N.  Vali,  Branch 
Manager  of  the  Parliament  Street  Branch  of  the  Bank, 
and  informed  Shri  Vali  that  Shri  Tuli  had  instructed 
him  to  take  Shri  Mehta  and  his  companion  to  Shri  Vali 
and  asked  him  to  open  three  foreign  letters  of  credit 
without  any  margin  on  behalf  of  KRSMA  Chemicals 
P,vt.  Ltd.  At  this  stage,  Shri  S.  P.  Mehta  handed  over 
to  Shri  Vali  a  letter  "from  the  Company  dated  Septem- 
ber 28,  1976  which,  inter  alia,  stated  that  "as  already 
sanctioned  by  your  Chairman  we  are  enclosing  here- 
with three  applications  for  opening  letters  of  credit 
by  cable  without  margin".  According  to  Shri  Vali, 
the  letter  along  with  the  oral  instructions  of  the 
Chairman  conveyed  through  Shri  D.  P.  Nayyar  consti- 
tuted approval  of  the  Head  Office  for  the  proposed 
transaction.  Shri  S.  S.  Jolly,  Manager  of  the  Foreign 
Exchange  Department  of  the  same  Branch,  who  hap- 
pened to  be  present  in  Shri  Vali's  room  at  the  relevant 
time,  has  added  that  Shri  Nayyar  had  also    instructed 


him  to  ensure  that  no  inconvenience  was  caused  to 
Shri  S.  P.  Mehta  and  that  the  work  was  done 
expeditiously. 

7.161  The  documents  covering  the  imported  goods 
arrived  in  December  1976.  The  Company  cleared  one  . 
of  these  for  a  sum  of  about  Rs.  1,60,000  but  failed  to 
clear  the  other  two  documents  totalling  about 
Rs.  7,70,000.  The  Company  pleaded  inability  to 
retire  them  in  view  of  the  tight  credit  squeeze  and 
came  forward  with  various  proposals  which  they  failed 
to  implement.  The  Bank  was  thus  left  with  no  option 
but  to  take  delivery  of  the  goods  to  avoid  further 
demurrage  etc.  The  total  cost  to  the  Bank  including 
customs  duty  and  demurrage  in  respect  of  these  two 
documents  amounted  to  Rs.  9.15  lakhs  and  according 
to  Shri  Vali's  statement,  the  Bank  is  likely  to  incur  a 
loss  of  Rs.  4.5  lakhs  on  the  transaction  after  taking 
into  account  the  prevailing  prices  of  these  chemicals 
in  the  market.  It  would  appear  that  the  chemicals 
were  imported  under  an  Actual  Users  Licence  and  that 
the  condition  that  goes  with  such  a  licence,  namely, 
that  it  can  be  sold  only  to  an  actual  user  would  restrict 
its  marketability. 

7.162  The  short  point  for  consideration  in  this 
case  is  whether  Shri  Tuli's  decision  to  enter  into  this 
transaction  expeditiously  and  his  directions  in  this 
regard  to  the  concerned  officers  was  influenced  solely 
by  his  commercial  judgment  in  relation  to  it  or  whether 
it  was  in  any  way  influenced  by  collateral 
considerations. 

7.163  That  Shri  Tuli  had  taken  the  decision  in  this 
regard  on  his  own  has  not  been  disputed  by  him,  even 
in  the  statement  dated  January  13,  1978,  filed  by  him 
in  response  to  the  Notice  under  Rule  5(2)(a)  of  the 
Commissions  of  Inquiry  (Central)  Rules,  1972.  Shri 
Tub  has,  however,  sought  to  furnish  certain  reasons 
for  arriving  at  this  decision  and  has  also  made  an 
attempt  to  blame  some  officers  for  certain  alleged 
procedural  irregularities:  There  is  no  need  to  consider 
such  alleged  irregularities,  if  they  relate  to  events 
subsequent  to  the  date  of  the  opening  of  the  letters  of 
credit  because'  the  vital  point  for  consideration  is  to 
examine  whether  normal  established  conventions  or 
procedure  had  been  followed  before  entering  into  the 
transaction  or  in  case  they  had  not  been  followed,  the 
reasons  for  such  departure  from  established  conventions 
and  procedure. 

7.164  In  his  written  statement  dated  November  A, 
1977  Shri  K.  N.  Vali  has  stated  that  the  normal  proce- 
dure followed  by  the  Punjab  National  Bank  in  the  case 
of  any  prospective  borrower  is  to  take  the  loan  applica- 
tion in  the  prescribed  form  accompanied  by  a  statement 
of  assets  and  liabilities  and  previous  experience  on  the 
basis  of  which  the  proposal  is  appraised  by  the  Branch 
after  ascertaining  the  credit-worthiness  of  the  borrower 
and  the  viability  of  the  proposal.  He  has  added  that 
unless  the  Bank  is  satisfied  about  the  credit-worthiness 
of  the  borrower  and  the  viability  of  the  project  no 
foreign  letter  of  credit  is  opened  without  any  margin. 
According  to  him,  all  this  procedure  would  take  a 
period  of  two  to  three  weeks  to  get  the  proposal  com- 
piled, processed  and  sanctioned  by  higher  authorities 
In  the  course  of  his  oral  testimony  on  November' 17, 
1977,  Shri  Vali  has  stated  that  he  did  not  make  any 


■  ■"■■:..  V'.-i -".".".";j; ■!:".! ■  '..■Ai'-.y,.  .. 


73 


pre-assessment  of  the  proposal  because  he  was  under 
instructions  of  his  higher  authorities.  He  has  added 
further  that  the  clear  instruction  that  the  letters  of 
credit  were 'to  be  established  "without  margin"  meant 
that  the  pre-assessment  required  had  been  made  by 
such  higher  authorities  and  that  they  knew  about  the 
party  well  enough  to  give  such  directions.  In  fact, 
Shii  Vali's  assessment  of  the  financial  soundness  of 
the  Company  was  made  after  the  event  and  his  com- 
ments in  relation  thereto  could  not  but  have  been 
influenced  by  the  fact  that  the  transaction  had  already 
been  made  and  had,  therefore,  to  be  justified.  Nor 
could  he  have  ignored  the  fact  that  the  Company  had 
been  strongly  recommended  to  him  by  no  less  a  person 
than  his  own  Chairman  and  Managing  Director, 

7.165  In  the  course  of  his  submissions,  Shri  Tuli's 
Counsel  referred  to  a  letter  dated  16th  September, 
1976  addressed  by  the  Company  to  the  Chairman 
of  the  Punjab  National  Bank.  The  original  of  the 
letter  was  produced  at  the  time  of  hearing  and  a  photo- 
stat copy  thereof  has  been  taken  on  record.  It  was 
seen  from  an  endorsement  on  the  letter  that  it  was 
received  in  the  Parliament  Street  Branch  of  the  Bank 
only  at  3  p.m.  on  the  27th  of  September,  1976.  .In 
this  letter  the  Company  had '  requested  the  Chairman 
to  issue  instructions  to  the  Greater  KaUash  Branch  of 
the  Bank  with  whom  the  Company  had  already  opened 
an  account,  to  issue  the  letter  of  credit  without  margin 
by  cable.  In  the  course  of  his  testimony  in  response 
to  the  summons  u/s  8B  of  the  Commissions  of  Inquiry 
Act,  1952,  Shri  tuli  has  stated  that  he  had  never  seen 
this  letter  and  that  it  never  came  to  him.  It  Was  Shri 
Tuli's  contention  that  the  letter  may  have  been  received 
by  his  personal  staff  and  forwarded  by  them  to  the 
concerned  Branch.  There  can  be  no  doubt  that  in 
the  normal  course,  a  letter  addressed  to  the  Chairman 
of  the  Punjab  National  Bank,  would  have  been  received 
by  him  or  his  personal  staff  on  his  behalf.  .In  this 
case,  if  the  personal  staff,  had  forwarded  the  letter  to 
the  concerned  Branch,  it  should  be  presumed  that 
they  would  have  sent  it  to  the  Branch  referred  to 
th  erein ,  n  aniely ,  the  Greater  Ka  ilash  B  ranch .  There  is  ■-, 
also  no  satisfactory  explanation  for  the  gap  of  about 
eleven  days  between  tiie  date  of  the  letter  and  the  date 
oh  which  if  was  received  by  the  Parliament  Street 
Branch  of  the  Bank  which  is  in  the  same  building  as 
the  Head  Office.  The  Commission  is,  therefore,  of  the 
view  that  this  letter  was,  in  fact,  received  by  Shri  Tuii 
and  was  with  him  for  some  time  until  he  took  a  decision 
in  relation  thereto  on  or  around  27th  September,  1976, 
when  he  had  it  forwarded  to  the  Branch  to  which  he 
subsequently  directed  the  representatives  .of  the 
Company. 

7.166  In  his  writen  statement  dated  January  13, 
1,978  referred  to  above,  Shri  Tuli  has  stated  that  on 
his  further  questioning,  Shri  S.  P.  Mehta  had  mentioned 
to  him  that  the  raw  materials  covered  by  the  import 
licences  were  being  imported  by  him  as  an  actual 
user  and  that  their  market  value  was  much  higher 
than  their  imported  value.  There  is  no  mention  of 
this  conversation  with  Shri  S.  P.  Mehta  either  m i  Shri 
Tuli's  written  statement  dated  November  14,  1977  or 
in  his  oral  testimony  before  the  Commission  on  Novem- 
ber 17,  1977.  On  the  other  hand,  he  has  pointed  out 
that  he  had  no  occasion  to  assess  the  financial  sound- 
ness of  the  Company  or  its  Directors  except  that  the 

SB9  HA  777— 11 


Directors  were  highly  connected  and  according  to  the 
person  who  introduced  him  to  them,  they  were  well 
experienced  in  the  line.  If  the  soundness  of  the  pro- 
posal as  distinct  from  the  financial  soundness  of  the 
party  had  been  arrived  at  that  stage  by  Shri  Tuli,  it  is 
most  unlikely  that  he  would  have  failed  to  mention  it 
at  the  earlier  stages.  In  fact,  in  his  oral  testimony 
before  the  Commission  on  November  17,  1977,  Shri 
Tuii  has  stated  that  because  of  the  fact  that  certain 
relatives  of  a  Minister  of  State  were  concerned,  the 
matter  was  expedited  and  immediate  action  taken. 
Herein  lies  the  deviation  from  normal  established  proce- 
dures. Normal  established  procedures  in  a  case  of 
this  type  would  have  required  the  completion  of  various 
formalities  and  considerable  pre-assessment  of  the 
Party's  credit-worthiness  and  viability  of  the  proposal. 
These  requirements  were  dispensed  with  because  of  the 
urgency  and  the  Chairman's  direction  to  act 
immediately. 

7.167  Under  the  circumstances,  this  is  a  clear 
instance  where  the  Chairman  and  Managing  Director 
of  the  Punjab  National  Bank,  Mr.  Tuli,  took  a  decision 
and  gave  directions  for  its  implementation  contrary  to 
the  normal  established  procedures  in  such  cases. 

13,  Concessions  by  Punjab  National  Bank  in  favour 

of  Maruti  Limited. 

7.168  In  1971,  Maruti  Ltd.,  a  Company  incorpo- 
rated under  the  Companies  Act,  1956  had  applied  to 
the  Punjab  National  Bank  for  certain  Cash  credit  and 
other  facilities.  From  early  1972,  the  Bank  allowed 
certain  facilities  and  by  the  time  Shri  T,  R.  Tuli  took 
over  as  Chairman  and  Managing  Director  Of  the  Bank 
in  August  1975,  the  Company  already  enjoyed  a  total 
facility  of  Rs.  90  lakhs  from  the  Bank  subject  to 
certain  stipulations.  Cash  credit  accounts  of  the  Com- 
pany with  the  Bank  started  becoming  irregular  from 
1974  onwards,  and  the  Bank  had  been  asking  them 
from  time  to  time  to  regularise  the  accounts.  The 
Bank  had  also  started  charging,  in  accordance  with  its 

■normal  practice,- penal  interest  on  the  accounts  to  the 
extent  to  which  they  Were  in  exteess  of  the  allowed 
limits. 

7.169  After  protracted  correspondence,  Maruti  Ltd., 
'wrote  to  the  Punjab  National  Bank  in  September  1976 
stating  that  they  had  incurred  heavy  losses  and  request- 
ed the  Bank  to  waive  the  penal  interest  and  also  to 
reduce  the  rate  of  interest  to  the  maximum  extent 
possible.  In  their  turn,  the  Company  agreed  to  regula- 
rise the  accounts  by  making  a  lump  sum  payment  of 
Rs.  5  lakhs  and  monthly  remittances  of  the  order  of 
Rs.  1  lakh.  The  then  Assistant  General  Manager 
(Credit)  of  the  Bank  considered  these  proposals  and 
recommended  to  the  Board  that  penal  interest  of  a 
little  over  Rs.  67,000  already  charged  in  the  accounts 
may  be  refunded  and  that  it  may  be  waived  for  the 
future.  He  also  recommended  that  the  rate  of  interest 
may  be  reduced  from  15i%  to  14%  per  annum.  This 
recommendation  was  endorsed  by  his  superior  officers 
and  was  approved  by  the  Board  at  its  meeting  held  on 
October  6,  1976. 

7.170  As  the  Company  failed  to  keep  up  its  commit- 
ment   regarding   recurring   payments    for   and    from 


74 


April  1977,  the  refund  of  pencil  interest  allowed  was 
cancelled  and  the  facility  of  concessional  interest  also 
stood  withdrawn. 

7.171  On  the  basis  of  these  facts,  the  question  that 
arises  for  consideration  is  whether  Shri  T.  R.  Tub,  the 
then  Chairman  and  Managing  Director  of     Punjab 
National  Bank  acted  rightly  in  accepting  and  recom- 
mending the  proposals  for  waiving  of  penal  interest 
and  for  reducing  the  fate  of  interest  charged  to  the 
party,  or  whether  he  should  have  resorted  to  legal 
proceedings  with  a  view  to  recovering  the  Bank's  out- 
standings.    Shri  T.  R.  Tuli  has  filed  a  statement  m 
response  to  the  Notice  under  Rule  5(2) (a)    oE  the 
Commissions  of  Inquiry   (Central)   Rules,  1972,  and 
has  also  appeared  in  response  to  the  summons  u/s 
SB  of  the  Commissions  of  Inquiry  Act,  1952. 

7.172  When  any  Bank  is  faced  with  what  is  gene- 
rally referred  to  as  a  'sticky  account',  it  can  either 
nurse  it  back  to  health,  inter  alia,  by  making  con- 
cessions in  the  matter  of  interest,  schedule  of  payments, 
etc.,  or  start  legal  proceedings  on  the  basis  of  the 
security  on  the  basis  of  which  advance  would  have  been 
made.  Often  it  is  seen  that  Bank's  interests  are  best 
served  by  adopting  the  first  course  of  action  as  the 
latter  can  land  the  Bank  in  needless  litigation  and 
-would  be  resorted  to  only  if  all  ether  efforts  fail.  It 
is,  therefore,  essentially  a  question  of  judgment. 

7.173.  In  view  of  "this  and  taking  into  account  the 
evidence  adduced  and  the  arguments  advanced,  the 
Commission  is  of  the  view  that  no  subversion  of  admi- 
nistrative procedures  or  misuse  of  power  or  abuse  of 
authority  has'  been  established  in  this  case. 

14.  Deviation  from  the  established  procedure  and 
irregularities  in  the  reconsiUution  of  the  Boards 
of  Air  India  and  Indian  Airlines  Corporations. 

7.174  The  terms  of  the  Boards  of  Air  India  and 
Indian  Airlines  Corporation  expired  on  August  31, 
1976.  Files  relating  to  reconstitution  of  the  two  Boards 
were  submitted  to  the  then  Minister  for  Tourism  and 
Civil  Aviation,  Shri  Raj  Bahadur.  He  directed  that 
for  the  time  being,  the  two  Boards  should  be  kept 
functioning,  and  the  Ministry  should  recommend  to 
the  approval  of  the  Appointments  Committee  of  the 
names  for  each  Board,  as  suggested  by  him,  and  leave 
the  remaining  members  to  be  nominated  later. 

7.175  Shri  N.  K.  Mufcirji,  Secretary  in  the  Ministry, 
accordingly,  sent  a  proposal  to  the  Establishment  Offi- 

s  cer  on  January  7,  1976,  requesting  him  to  obtain 
the  approval  of  the  Appointments  Committee  of  the 
Cabinet  and  for  a  long  time  no  final  decision  was 
conveyed  to  the  Ministry  in  spite  of  several  reminders. 
On  February  9,  1976,  Shri  N.  S.  Bhatnagar,  the  then 
.Special  Assistant  in  the  Ministry  of  Tourism  and  Civil 
Aviation  received  a  telephonic  message  from  the  Addi- 
tional Private  Secretary  ito  the  Prime  Minister  (Shri 
R.  K.  Dhawan)  suggesting  to  Shri  Bhatnagar  that 
certain  names  should  be  recommended  to  the  Appoint- 
ments Committee  of  the  Cabinet  as  Members  of  the 
.Boards  of  Directors  of  the  two  Corporations.  Shri 
Dhawan  informed  Shri  N.  S.   Bhatnasar  that  those 


names  had  been  suggested  by  the  then  Prime  Minister 
Smt.    Indira    Gandhi    and   further   stated    that    Shri 
Bhatnasar  should   not  mention  those  names   to   the 
Secretary  of  the  Ministry,  Shri  N.  K.  Mukarji.   At  that 
time   the  Minister  was  away-on  tour  and  Shri  Dhawan 
advised  that  Shri  Bhatnagar  should  send  the  proposal 
under  his  own  signatures.  Shri  Bhatnagar  declined  to 
do  so  saying  that  he  was  incompetent  to  cany  out  the 
suggestion   and    that   recommendation    of   the  names 
should  await  the  Minister's  return.    Shri  Dhawan  felt 
annoyed    at    what   Shri    Bhatnagar   said.     Shri   Raj 
Bahadur  returned  to  Headquarters  the  same  evening 
and    was    apprised    of    the    conversation    by    Shri 
Bhatnagar,  which  he  had  with  Shri  Dhawan.     Shri 
Bhatnagar  also  furnished  to  Shri  Raj  Bahadur  the  list 
of  names  which  had  been  dictated  to  him  by  Shri 
Dhawan  on  telephone. 

7.176  Shri  Raj  Bahadur,  accordingly,  sent  a  fresh 

proposal  for  reconstitution  of  the  two  Boards  directly 

to  the  Prime  Minister  on  February  10,  1976,  under 

his  own  signature.     This  fresh  proposal  contained  all 

the  names  which  were  dictated  by  Shri  R.  K.  Dhawan 

to  Shri  Bhatnagar  on  telephone.   The  approval  of  the 

Prime  Minister  to  the  fresh  proposal  was  received  the 

same  evening  i.e.  on  February  10,  1976.    The  names 

which  were  dictated  to  Shri  Bhatnagar  and  included 

in  the  proposal  of  Shri  Raj  Bahadur  were  ultimately 

approved  by  the  then  Prime  Minister  on  February  10, 

1976,  resulting  in  certain  changes.  Shri  Raj  Bahadur's 

proposal  contained  the  names  of  Capt.  A.  M.  Eapoor, 

Regional  Director,  Calcutta,  who  was, junior  to  Shri 

V,  Satyamurthy,  who  was  then  the  Deputy  Managing 

Director,  for  appointment  as  Director  of  the  Indian 

Airlines  Corporation.    The  names,  which  were  dropped 

from  the  earlier  proposal  submitted  by  the  Ministry 

were  Shri  S.  Y.  Ranade,  and  Shri  K.  G.  Appuswaniy 

from  the  Air  India  and  Shri  S.  Y.  Ranade  and  Shri 

V,  Satyamurthy  from  th?  Indian  Airlines  Board. 

7.177  Air  Chief  Marshal  P.  C.  Lai,  who  was  the 
Chairman  arid  Managing  Director  of  the  Indian  Air- 
lines, was  dissatisfied  with  the  omission  of  the  name 
oE  Shri  V.  Satyamurthy.  He  made  a  representation 
to  the  Minister  Shri  Raj  Bahadur.  He  also  submitted 
a  representation  to  the  Prime  Minister  in  this  behalf 
and  ultimately  submitted  his  resignation  because  his 
suggestion  for  reconsideration  was  not  accepted. 

7.178  For  appointments  of  the  non-official  Members 
of  the  two  Boards  the  Ministry  did  not  seek  the  advice 
of  the  P.E.S.B.  Also  the  Ministry  did  not  consult  the 
Chairman  of  the  two  Boards  before  finalisation  of  the 
proposals.  The  proposal  for  a  reconstitution  of  the 
two  Boards  was  not  sent  to  the  Establishment  Officer, 
which  is  the  normal  procedure  for  seeking  approval  of 
Appointments  Committee  of  the  Cabinet,  and  the  pro- 
posals were  sent  by  the  Minister  directly  to  the  Prime 
Minister  and  her  approval  was  obtained  before  the 
Establishment  Officer  was  requested  to  obtain  the  for- 
mal approval  of  the  Appointments  Committee.  This 
was  _  done  without  consulting  the  Secretary  of  the 
Ministry.  The  Department  of  Personnel  and  Adminis- 
trative Reforms  were  not  even  aware  of  the  develop- 
ments of  the  case  and  though  the  proposal  was  sent 
by  Shri  Raj  Bahadur  and  had  been  approved  by  the 
Prime   Minister   on    February    10,    1976,    the    Joint 


...Z'^-'-i,  ...-.■„_  ^  jili..-'.:*    I.-:  j  . 


, .    • 


_J*tA,j  .  '  ^^ii&iJStSiii; 


Secretary,  Department  of  Personnel  and  Administrative 
Reforms  informed  the  Secretary,  Ministry  of  Tourism 
and  Civil  Aviation  through  a  D.O.  letter  dated  Feb- 
ruary 9/11,  1976,  that  it  was  understood  from  the 
Prime  Minister's  Secretariat  that  the  Minister  of  Tour- 
ism and  Civil  Aviation  was  reconsidering  the  proposals 
for  the  reconstitution  of  the  Boards;  and,  therefore,  no 
action  was  being  taken  On  the  Secretary's  communi- 
cation dated  January  7,  1976. 

7.179  The  approval  of  the  names  of  the  Directors 
were  notified  on  February  13,  1976.  On  the  same 
day  the  Establishment  Officer  was  requested  to  obtain 
formal  approval  of  the  Appointments  Committee  of 
the  Cabinet,  which  was  communicated  by  the  Estab- 
lishment Officer  on  February  .27,  1976. 

7.180  It  appears  from  the  evidence  of  Shri  Raj 
Bahadur  that  he  was  not  a  free  agent  in  the  matter 
of  making  recommendations.  He  had  submitted  his 
recommendations  on  January  7,  1976.  During  his 
absence  his  Special  Assistant  was  directed  to  submit 
a  fresh  list  omitting  certain  names  and  adding  certain 
other  names.  Shri  R.  K.  Dhawan,  Additional  Private 
Secretary  to  the  Prime  Minister  suggested  that  without 
reference  to  -the- -Secretary-  to  the  Ministry,  under  his 
own  signatures  Shri  Bhatnagar  may  send  the  list  to 
the  then  Prime  Minister,  but- Shri  Bhatnagar  declined 
to  do  so.  When  the  Minister  returned,  he  carried  out 
the  suggestions  which  were  made.  Apparently,  there 
was  nothing  against  Shri  V.  Satyamurthy,  who  was 
dropped  from  the  list  of  Directors.  In  protest  against 
the  dropping  of  Shri  V.  Satyamurthy  from  the  list,  the 
Chairman  of  the  Indian  Airlines  Board,  Air  Chief 
Marshal  P.  C.  Lai  finding  that  he  was  unable  to  secure 
any  reconsideration  for  Shri  V,  Satyamurthy  and  that 
even  his  representations  made  to  the  Prime  Minister 
had  not  been  considered,  submitted  his  resignation. 

7.181  It  appears  that,  Air  Chief  Marshal  P.  C.  Lai 
was  subjected  to  police  surveillance  till  he.  left  his  office. 

7.1.82  Smt.  Gandhi  was  sewed  with  a  notice  under 
rule  5(2)  (a)  of  the  Commissions  of  Inquiry  Rules 
and  summons  under  section  SB  of  the  Commissions  of 
Inquiry  Act  in  connection  with  this  case.  She  did 
not  file  any  statement  and  when  she  appeared  before 
the.  Commission,  she  refused  to  make  any  statement 
On  oath.  Under  the  circumstances,  therefore,  the 
Commission  has  no  alternative  but  to  draw  an  adverse 
inference  against  her  in  view  of  the  circumstances  and 
in  the  light  of  the  evidence  available  on  the  record. 

7.183  In  this  case,  it  appears  that  the  normal  or 
established  procedure  in  regard  to  the  appointment 
pf  the  Board  of  Directors  was  not  followed  and  Minis- 
ter Shri  Raj  Bahadur  was  practically  compelled  to  fall 
in  line  with  the  suggestions  made  by  the  then  Prime 
Minister,  Smt.  Gandhi,  and  it  was  only  after  the  sugges- 
tion made  by  her  was  carried  out  that  the  lists  sub- 
mitted were  approved. 

7.184  In  this  case,  as  in  many  other  cases,  the 
instructions  issued  from  the  Prime  Minister's  office: 
were  oral  and  given  by  th&  Additional  Private  Secretary 

to   the   Prime   Minister.     Though   pursuant  to   these 
instructions  Shri  Bhatnagar  himself  failed  to  act,  as 


desired  by  Shri  Dhawan,  the  Minister  complied  with. 
these  instructions  on  the  lines  suggested  by  Shri 
Dhawan. 

7.185  The  role  of  oral  instructions  in  the  transac- 
tions of  business  of  the  Government  needs  to  be  de- 
fined and  definite  guidelines  set  down.  To  the  Com- 
mission this  seems  imperative,  not  only  in  the  interest 
of  healthy  administration,  but  also  to  protect  the  junior 
functionaries  acting  on  the  oral  instructions  of  the 
seniors  from  the  consequences  of  subsequent  denials 
by  the  seniors  when  things  go  wrong. 

15,  Decision  process  leading  to  the  purchase  of  three 
Boeing  737  aircraft  by  Indian  Airlines. 

7.186  A  special  group  was  constituted  to  study  the 
proposal  for  augmentation  of  capacity  in  the  Indian 
Airlines  in  May,  1976.  The  group  was  to  study  the 
various  aspects  dealing  with  operational  capabilities, 
financial  terms  and  economics  of  the  aircraft  available 
in  the  market  and  recommend  the  most  suitable  air- 
craft fleet  composition  and  programme  of  induction 
extending  over  the  period  from  October,  1976  to 
March,  1979.  This  Committee  dealt  with  the  various 
technical  details,  airport  constraints  and  financial  eva- 
luation of  the  various  types  of  aircraft.  While  certain 
of  the  aircraft,  such  as,  F-27  and  BAC-111  were 
subjected  to  proving  flights  on  Indian  Airlines  selected 
routes  to  study  their  operational  performance  figures, 
Boeing  737  was  considered  on  the  basis  of  technical 
data  supplied  by  the  manufacturer  but  without  any 
route  testing.  The  report  of  this  Committee  was  plac- 
ed before  the  Indian  Airlines  Board  at  its  meeting 
held  On  August  16,  1976,  and  it  was  decided  that  an 
Interline  Committee  consisting  of  the  Joint  Secretary 
(Finance),  Ministry  of  Tourism  and  Civil  Aviation 
and' the  Managing  Directors  of  Air  India  and  Indian 
Airlines  should  study  these  proposals. 

7.187  The  Interline  Committee  had  not  finalised 
its  views. yet  when  on  October  29,  1976,  morning 
Shri  P.  N.  Dhar,  Secretary  to  the  Prime  Minister  spoke 
to  Shri  N.  K.  Mukarji,  Secretary,  Civil  Aviation,  on 
phone.  Shri  N.  K.  Mukarji  in  his  affidavit  given  to 
the  Commission  has  stated  that  Shri  P.  N..  Dhar  had 
conveyed  to  him  that  it  was  the  Prime  Minister's 
impression  that  the  Ministry  of  Tourism  and  Civil 
Aviation  was  obstructing  the  purchase  of  Boeing  737 
aircraft  by  Indian  Airlines,  Shri  Mukarji  wrote  back 
to  the  Secretary  to  the  Prime  Minister  the  same  day 
indicating  that  there  was  no  proposal  about  the  pur- 
chase of  aircraft  by  Indian  Airlines  pending  ;with  the 
Ministry.  However,  the  Board  of  Directors  of  Indian 
Airlines  had  considered  the  matter  and  had  referred 
it  to  an  Interline  Committee  for  detailed  examination 
on  August  16,  1976,  which  was  yet  to  finalise  its 
views.  Shri  Mukarji  also  informed  Shri  P.  N.  Dhar 
that  the  Minister  had  taken  a  meeting  that  morning  at  ■ 
which  it  was  decided  to  extend  the  deadline  of  the 
Boeings  offer  from  the  end  of  October,  1976  to 
December  31,  1976. 

7.188  On  the  same  day:  i.e.  on  October.  29,  1976, 
Shri  N.  K.  Mukarji,  .Secretary,  Civil  Aviation  and 
Tourism  was  sent 'for  by  Shri  Raj  Bahadur,  the  then 


76 


Minister  of  Civil  Aviation,  to  Attend  a  meeting,  at 
which  were  present  already  Shri  A.  H.  Mehta,  Acting 
Chairman  of  Indian  Airlines  and  Shri  Kirpal  Chand, 
Director  (Finance)  of  Indian  Airlines. 

7.189  While  tire  meeting  was  on,  Shri  Dhawanrang 
up  Shri  Raj  Bahadur  and  Shri  Raj  Bahadur  was  licard 
to  say: 

"Yes,  Dhawan  Sahib,  I  am  going  into  the  matter 
with  my  officers,  who  are  with  me." 

7.190  At  this  meeting  Shri  A.  H,  Mehta  suggested 
that  a  letter  of  intent  should  be  placed  on  the  Boeing 
Company  before  their  latest  ollet  expired  on  Novem- 
ber 1,  1976.  Pending  the  receipt  of  the  recommenda- 
tions of  the  Interline  Committee  and  final  decision  by 
the  Indian  Airlines  Board,  the  Indian  Airlines  Manage- 
ment sent  a  letter  on  October  30,  1976  requesting  for 
permission  to  issue  a  letter  of  intent  to  the  Boeing 
Company  in  respect  of  purchase  of  three  Boeing  737 
aircraft.  This  letter  was  actually  handed  over  to  the 
Secretary  at  a  Meeting  held  on  October  30,  1976,  and 
after  discussion  it  was  agreed  that  the  requisite  letter 
of  intent  could  be  issued  subject  to  the  condition  that 
it  did  not  involve  any  pommitment  for  purchase  of 
aircraft.  However,  it  was  also  decided  that  the  other 
manufacturers  may  also  be  approached  and,  if  neces- 
sary, similar  letters  of  intent  may  also  be  issued  to 
them. 

7.191  A  meeting  appears  to  have  taken  place  in  the 
second  or  third  week  of  September,  1976,  in  the  ofhee 
of  Shri  A.  H.  Mehta,  at  which  were  present  Shri 
Kirpal  Chand,  Director,  Indian  Airlines,  Capt.  A.  M. 
Kapoor,  Director  of  Operations  and  Shri  Rajiv  Gandhi 
son  of  Smt.  Indira  Gandhi.  There  are  conflicting 
versions  as  to  how  Shri  Rajiv  Gandhi  happened  to  be 
there  in  that  meeting.  Shri  A.  H.  Mehta  has  stated 
that  Capt.  Kapoor  had  rung  him  up  and  asked  him 
whether  he  could  come  along  and  discuss  certain  tech- 
nical and  maintenance  problems  along  with  an  Avro 
Commander  and  Shri  Mehta  agreed  to  meet  him; 
but  when  Capt.  Kapoor  came  in,  the  Commander,  who 
had  accompanied  him,  happened  to  be  Capt-  Rajiv 
Gandhi.  Shri  Kapoor  has,  however,  stated  that  Shri 
Rajiv  Gandhi  was  already  with  Shri  A.  H.  Mehta  when 
Shri  Kapoor  came  into  the  room  of  Shri  A.  H.  Mehta, 
Shri  Kapoor  also  stated  that  at  this  meeting  Shri  Kirpal 
Chand,  Director  (Finance) ,  Indian  Airlines  had  shown 
Shri  Rajiv  Gandhi  the  Financial  projections.  Accord- 
ing to  Shri  Kirpal  Chand  he  showed  the  financial  pro- 
jections to  Shri  Rajiv  Gandhi  at  the  instance  of  the 

.Chairman,  Shri  A.  H.  Mehta.  According  to  Shri 
Mehta's  statement  he  did  not  remember  having  given 
any  such  directions  to  the  Finance.  Director  to  show 
the  financial  projections  to  Shri  Rajiv  Gandhi.  At  this 
meeting,  according  to  Shri  Mehta,  Capt.  Kapoor  is 
reported  to  have  said  that  he  did  not  understand  why 
there  was  so  much  delay  in  the  progress  of  the  case 
dealing  with  the  purchase  of  the  Boeing  aircraft,  which, 
according  to  Shri  Kapur,  were  operationally  and  tech- 
nically superior. 

7.192  The  Interline  Committee  made  their 
recommendations  on  November  3,  1976,  recommending 
the  purchase  of  Boeing  737  aircraft.  Shri  Badal  Roy, 


who  was  Joint  Secretary  (Finance)  in  the  Ministry  of 
Tourism  and  Civil  Aviation  and  who  was  a  member  of 
the  Interline  Committee,  had,  however,  observed  : 

"Indian  Airlines  should  adopt  a  total  systems 
approach  rather  than  an  ad  hoc  interim 
solution,  which  might  adversely  ulluct  Die 
optimum  long  term  solution,  perhaps  at  heavy 
cost." 

7.193  The  Indian  Airlines  proposal  for  the  purchase 
of  three  Boeing  737  aircraft  was  sent  to  the  Ministry 
on  November  20,  1976.  The  Airlines  Board  at  its 
meeting  held  on  November  24,  1976,  approved  the 
action  of  the  Management  in  seeking  Government's 
approval  for  purchase  of  the  aircraft.  Shri  O.  P.  Mehra, 
Rt.  Air  Chief,  however,  opposed  it  on  the  ground  that 
it  was  not  based  on  any  system  study. 

7.194  The  proposal  was  received  in  the  Planning 
Commission  on  November  26,  1976.  The  Planning 
Commission  felt  that  "there  was  sufficient  reason  for 
believing  that  the  acquisition  of  B-737  may  not  be 
appropriate  and  that  a  decision  should  not  be  taken 
without  the  completion  of  a  system  study". 

7.195  Shri  Nite'n  Desai,  Consultant  in  the  Project 
Appraisal  Division  of  the  Planning  Commission,  who 
was  examined  by  the  Commission,  stated  that  the  sys- 
tem study  could  have  been  completed  in  about  two 
months.  Shri  Desai  had  asked  for  a  system  study  report 
to  be  obtained  at  the  meeting  which  he  had  attended  in 
the  room  of  the  Secretary  Aviation,  Shri  N.  K.  Mukarji 
on  October  30,  1976.  Apparently,  the  Indian  Airlines 
had  not  taken  any  steps  pursuant  to  this  suggestion  "of 
Shri  Desai. 

7.196  The  matter  was  referred  to  the  Public  Invest- 
ment Board,  which  considered  the  proposal  at  its 
meeting  held  on  January  10,  1977,  and  January  13, 
1977,  The  following  important  decisions  were  taken 
by  the  P.I.B  :— 

(i)  A  system  study  be  undertaken  and  completed 
by  the  Indian  Airlines  by  the  end  of 
February,  1977  ; 

(ii)  If  on  the  basis  of  an  integrated  study,  it 
transpired  that  a  new  proposal  involving  a 
larger  order  of  new  aircraft  emerged,  the 
advantage  of  bulk  purchase  could  be 
obtained; 

(iii)  Indian  Airlines  could  approach  the  manufac- 
turers to  hold  both  their  price  and  delivery 
schedules  using  the  leverage  of  possibly  a 
large  order. 

7.197  According  to  Shri  Kirpal  Chaiid,  they  were 
all  "upset  at  the  decision  of  the  P.I.B.  to  defer  the 
augmentation  of  capacity  pending  completion  of  the 
Total  System  study".  Shri  Kirpal  Chand  said  that  after 
the  meeting  when  they  all  went  to  the  office  of  'the 
Chairman,  Shri  A.  H.  Mehta,  Shri  Mehta  remarked  that 
"you  technocrats  have  not  been  able  to  get  the  aircraft 
for  me.  Now  I  will  get  them  for  you".  Shri  Mehta  has 
stated  that  immediately  on  his  return  from  the  P.I.B. 


;.:.- ';.'_',-^r:  .,■.■■-  .;;;■■'.:-.-■;  '-".- 


^^:^Jt^m^^^^^^y:^^^^-^'^^^^^^^^^ 


11 


meeting,  he  got  a  phone  call  from  the  Minister  for 
Tourism  and  Civil  Aviation,  Shri  K.  Raghuramaiah, 
who  was  "visibly  annoyed  over  the  postponement  of  the 
decision  to  purchase  trie  Boeing  atrcralt".  Shri  Mehta 
does  not  corroborate  what  Shri  Kirpal  Chand  ha$  said 
regarding  the.  technocrats  not  being  able  to  get  the  air- 
craft, etc.  He,  however,  admits  that  there  was  dis- 
cussion between  him,  Shri  Kirpal  Chand  and  others ; 
when  he  had  said  that  the  technical  department  had  not 
been  able  to  satisfy  the  Planning  Commission. 

7.198  Ever  since  Shri  Raghuramaiah  took  over  as 
Minister  for  Civil  Aviation  and  Tourism  on  December 
24,  1976,  he  was  anxious  that  the  case  relating  to  the 
purchase  of  aircraft  by  the  Indian  Airlines  should  be 
processed  urgently.  He  had  spoken  to  the  Secretary 
Shri  N.  K.  Mukarji  on  more  than  one  occasion.  Shri 
Raghuramaiah  has  also  stated  that  shortly  after  he  took 
charge  of  the  Ministry,  during  one  of  his  visits  to  the 
Prime  Minister's  house  in  connection  with  some  Parlia- 
mentary affairs  matters,  Shri  Dhawan  had  told  him  that 
the  Boeing  purchase  case  was  pending  and  was  being 
delayed  in  his  Ministry.  Shri  Dhawan  wanted  him  to 
look  into  it.  Shri  Raghuramaiah  took  Shri  Dhawan's 
reference  to  this  subject  as  an  order  emanating  from 
the  Prime  Minister.  In  support  of  this  Shri  Raghura- 
maiah said  that  as  the  Minister  Incharge  of  Parliamen- 
tary ASairs,  he  had  obtained  the  resignations  of  Shri 
Uraa  Shankar  Dikshit,  Shri  Swaran  Singh  and  Shri 
Raj  Bahadur  and  a  number  of  other  Ministers,  just 
because  Shri  Dhawan  told  him  to  do  so.  He  took 
what  Shri  Dhawan  had  said  as  coming  from  the  Prime 
Minister  herself. 

7.199  Shri  N.  K.  Mukarji,  Secretary,  Aviation  had 
advised  the  Minister  that  the  recommendations  of  the 
P.I.B.  should  be  accepted  with  regard  to  the  system 
study,  etc.  However,  the  Minister  overruled  the  Secre- 
tary's advice  and  directed  that  the  matter  be  immedia- 
tely referred  to  the  Cabinet  recommending  purchase  of 
three  BOeing-737  aircraft. 

7.200  Oa  February  8,  1977,  the  Minister  called 
Shri  Kirpal  Chand  and  told  him  that  the  proposal  had 
been  finally  cleared  by  the  Cabinet.  The  Minister  also 
instructed  Shri  A,  S.  Bhatnagar,  Joint  Secretary,  Avia- 
tion, to  ensure  that  the  formal  approval  was  communi- 
cated to  the  Corporation  the  same  day  and  the  contract 
was  signed  immediately.  The  Ministry's  sanction  for 
purchase  of  three  Boeing-737  aircrafts  at  a  total  project 
cost  of  Rs.  30.55  crores  was  issued  to  the  Indian  Air- 
lines the  same  day  i.e.  February  8,  1977  ;  and  was 
delivered  to  Shri  Kirpal  Chand  by  hand  on  the  same 
day.  In  the  sanction  it  was  mentioned,  inter  alia,  that 
the  Indian  Airlines  should  further  negotiate  with  the 
Sellers  and  try  to  obtain  the  best  possible  terms  for  the 
three  aircraft.  According  to  Shri  C.  L.  Dhingra, 
Deputy  Secretary,  Civil  Aviation,  the  Intention,  was  to 
associate  Joint  Secretary  (Finance)  in  the  Ministry 
with  the  negotiating  .team.-  Even- before  the  Ministry 
could  inform  Indian  Airlines  that  the  Joint  Secretary 
(Finance)  would  be  the  representative  on  the  negotiat- 
ing team,  the  Indian  Airlines  informed  the  Ministry 
that  they  had  signed  the  contract  with  the  company 
on  February  9,  1977  ;  i.e.  a  day  after  the  issue  of  the 
sanction    and    had    obtained    a    further   discount    of 


$  15,000  per  aircraft.  The  Joint  Secretary  (Finance) 
was,  thus,  not  associated  with  the  negotiations  with  the 
Boeing  Company. 

7.201  Shri  Raghuramaiah  has  stated  that  after  the 
Cabinet  meeting  was  over  on  February'  5,  1977,  at 
which  the  decision  to  purchase  the  Boeing  aircraft  was 
taken,  the  Prime  Minister  had  told  him  about  a  report ' 
that  had  appeared  in  a  Wall  Street  Journal  about  some 
deal  with  tne  Boeing  Company.  She  had  asked  him  to 
wait  before  the  purchase  order  was  placed ;  and  three 
days  therefater  she  told  him  to  "Go  ahead.  Place  the 
order".  Immediately  after  that  he  told  his  officers  to 
sign  the  contract. 

7.202  It  would  thus  be  apparent  that  the  manner  in 
which  this  deal  was  pushed  through  suffers  from  several 

infirmities  : 

(i)  Even  before  the  Interline  Committee,  which 
was  constituted  by  the  Indian  Airlines  Board 
to  study  the  proposal  in  depth  and  the  com- 
parative merits  of  the  available  aircraft,  had 
submitted  its  report,  the  Indian  Airlines 
Management  sent  a  letter  to  the  Ministry  for 
permission  to  issue  a  letter  of  intent  to  the 
Boeing  Company. 

(ii)   The  Indian  Airlines  -submitted  its  proposal  for 

purchase  of  the  aircraft  to  the  Ministry  on 
November  20,  1976,  and  it  was  only  later  on 
November  24,  1976  that  the  Indian  Airlines 
Board  approved  the  action  of  the  Manage- 
ment seeking  the  Government's  approval  for 
purchase  of  the  aircraft. 

(iii)  The  Planning  Commission's  representatives 
had  desired  at  the  meeting  held  on  October, 
1976,  that  a  system  study  should  be  under- 
taken by  the  Indian  Airlines,  which  was 
capable  of  being  completed  within  two 
months.  But  no  steps  were  taken  to  complete 
this  study. 

(iv)  The  P.I.B.  categorically  opposed  the  proposal 
pending  the  completion  of  the  system  study. 
The  Secretary's  recommendations  to  abide 
by  the  P.I.B.'s  recommendations  were  turned 
down  by  the  Minister,  Shri  Raghuramaiah  ; 
apparently  because  he  had  been  asked  by 

t  ■  Mr.  Dhawan  to  look  into  the  matter  urgently 
and  Shri  Raghuramaiah  took  the  suggestion 
of  Shri  Dhawan  as  emanating  from  the  Prime 
Minister. 

(v)  According  to  the  Finance  Ministry,  there  was 
no  instance  of  an  Administrative  Ministry 
going  ahead  with  the  proposal  to  the  Cabinet 
for  a  decision  against  the  recommendations 
of  the  P.I.B.  This  was  done  in  this  case. 

(vi)  The  decision  to  sign  the  contract  was  given 
on  February  8,  1977.  On  February  9,  1977 
the  contract  was  signed.  Actually,  the  deli- 
very schedule  limit  given  by  the  Boeing  com- 
pany had  expired  on  February  7. 


73 


(vii)  The  visit  of  Shri  Rajiv  Gandhi  to  the  office 
oi *the  Chairman  of  the  Indian  Airlines,  where 
he  was  shown  the  financial  projections  by  the 
Director  of  Finance,  apparently  under  the 
instructions  of  the  Chairman,  was  a  proce- 
dure, which  was  totally  outside  the  ordinary 
course  of  business, 

7.203  In  the  light  of  the  foregoing,  the  Commission 
feels  that  there  has  been  a  certain  amount  of  avoidable 
haste  in  rushing  through  the  deal. 

16.  Detention  of  Smt,  Gayatri  Devi,  Ex-Member  of 
Parliament  and  Lt,  Col,  {Retired)  Bhawani  Singh 
under  COFEPOSA  Act,  1974. 

7.204  By  two  sets  of  orders  passed  by  the  Central 
Government  on  24th  July  1975,  one  being  detention 
order  under  section  3(1)  and  the  other  being  declara- 
tion tinder  section  12A(2)  of  the  Conservation  of 
Foreign  Exchange  and  Prevention  of  Smuggling  Acti- 
vities Act,  1974  (.hereinafter  referred  to  as  COFEPOSA 
Act),  Smt.  Gayatri  Devi  and  Lt.  Col.  Bhawani  Singh 
were  arrested  and  lodged  in  Tihar  Jail  at  Delhi  on 
30th  July,  1975.  Smt.  Gayatri  Devi  is  the  widow  of 
late  His  Highness  Maharaja  Man  Singh  of  Jaipur.  She 
was  a  Member  of  Parliament  as  a  Swatantra  M.P.  when 
she  was  arrested.  Lt,  Col.  Bhawani  Singh  had  been  a 
full-time  service  officer  in  the  Indian  Army.  He  was 
the  recipient  of  the  Mahavir  Chakra  for  his  gallantry 
in  the- 1971  war  with  Pakistan,  He  voluntarily  retired 
from  Army  service  in  November  1974  on  personal 
grounds. 

7.205  The  Income  Tax  Department  conducted  some 
searches  under  section  132  of  the  Income  Tax  Act, 
1961  in  the  month  of  February  1975  at  Jaipur  and 
Delhi  residences  of  Smt.  Gayatri  Devi,  Lt.  Col.  Bhawani 
Singh,  his  brothers  and  in  other  connected  eases. 
During  the  course  of  these  search  operations,  gold,  gold 
ornaments,  some  foreign  currency  including;  U.S. 
Dollars  and  Travellers  Cheques  etc.,  were  seized  from 
the  residences  of  Smt.  Gayatri  Devi  and  Lt.  Col.  Bha- 
wani Singh.  A  key  of  a  locker  in  Rome  of  Shri 
Bhawani  Singh  was  also  recovered. 

7.206  After  the  news  regarding  searches  by  the 
Income  Tax  Department  was  known,  there  were  ques- 
tions in  both  the  Houses  of  Parliament  in  the  month  cf 
February  and  March  1975.  Giving  replies  to  various 
points  raised  in  the  Lok  Sabha  and  Rajya  Sabha,  the 
then  Minister  of  Finance,  Shri  C.  Subramaniam  and 
■Shri  Pranab  Kumar  Mukherjee  staled  that  enquiries  in 
these  matters  were  in  progress.  Shri  Pranab  Kumar 
Mukherjee  specifically  stated  in  Lok  Sabha  on  4th 
March,  1975  that  "no  prosecution  has  yet  been  launch- 
ed because  we  arc  not  in  possession  of  'full  facts". 

.7.207  Consequent  to  the  information  revealed  during 
income  tax  searches,  various  documents  and  papers 
considered  relevant  from  the  point  of  view  of  violation 
of  the  provisions  of  Foreign  Exchange  Regulation  Act 
were  taken  possession  of  by  the  Enforcement  Directo- 
rate of  the  Ministry  of  Finance  from  the  Income  Tax 
Department  and  the  said  Directorate  started  making 
its  enquiries.  These  two  persons  were  issued  directives 


by  the  Enforcement  Directorate  under  section  33(2)  of 
the  Foreign  Exchange  Regulation  Act,  1973  for  furnish- 
ing information  on  the  various  points  mentioned  in 
these  directives.'  On  requests  being  made,  Smt.  Gayatri 
Devi  was  allowed  time  upto  22-S-1975  and  Lt.  Col. 
Bhawani  Singh  upto  20th  August,  1975  'for  making 
necessary  compliance  to  these  directives. 

7.208  Even  before  the  time  allowed  to  these  two 
individuals  for  complying  with  the  directives  issued  had 
expired,  action  to  impound  the  passport  of  Smt.  Gayatri 
Devi  was  initiated  and  an  order  dated  June  4,  1975 
was  passed  by  the  Ministry  of  External  Affairs  im- 
pounding her  passport.  Also  enquiries  were  made  to 
tiud  out  ways  and  means  for  their  arrest  under  one 
of  the  other  provisions  of  the  Acts  administered  by  the 
Ministry  of  Finance. 

7.209  A  meeting  is  reported  to  have  taken  place 
in  this  connection  in  the  room  of  the  then  Minister  of 
State,  Shri  Pranab  Kumar  Mukherjee  on  July  24,  1975 
which  was  attended,  amongst  others,  by  Shri  G.  S. 
Sawhney,  Director  General  of  Revenue  Intelligence  and 
Investigation.  According  to  the  statement  of  -Shri  G.  S. 
Sawhney,  he  was  asked  either  by  the  Minister  or  some- 
body else  who  was  present  in  the  meeting  to  find  out 
whether  any  material  which  could  be  relevant  for  the 
purpose  of  COFEPOSA  Act  was  available  against  Smt, 
Gayatri  Devi  and  Col.  Bhawani  Singh.  In  his  subse- 
quent statement  before  the  Commission,  Shri  Sawhney 
lias  stated  that  this  meeting  was  some  time  before 
lunch,  the  question  that  was  being_..discussed  in  "the 
meeting  related  to  the  detention  of  these  two  persons 
and  that  it  was  imbued  with  a  sense  of  urgency  also. 
He  was  thereafter  told  to  provide  the  factual  informa- 
tion available  with  the  Directorate  to  the  Ministry. 
Shri  Sawhney  has  further  stated  that  in  the  meeting 
with  the  Minister,  he  got  the  impression  that  the  Minis- 
ter wanted  the  detentions  to  be  made  under 
COFEPOSA  Act  and  that  an  order  should  be  passed 
under  section  3  of  the  COFEPOSA  Act. 

7.210  Shri  Sawhney  accordingly  contacted  the 
Director,  Enforcement  and  later  the  Dy,  Director,  in 
charge  of  the  Delhi  Zone  of  the  Enforcement  Directo- 
rate and  asked  the  Dy,  Director  to  come  over  to  his 
.office  along  with  the  material  that  was  available  against 
the  two  persons.  Accordingly  Shri  A.  M.  Sinha,  Dy. 
Director  processed  the  material  that  was  available  with 
him  against  both  these  persons  in  the  room  of  Shri 
Sawhney,  prepared  two  sets  of  notes  concerning  these 
two  persons,  showed  these  to  his  Director,  Enforcement 
Shri  S.  B..  Jain  and  passed  these  on  ultimately  to  Shri 
Sawhney.  While  processing  the  material  that  was 
available  with  the  Deputy  Director  of  Enforcement, 
against  the  two  individuals,  certain  significant  omissions 
were  made  in  reproducing  the  information  contained  in 
the  two  letters  which  had  been  received  from  the 
Reserve  Bank  of  India  in  response  to  queries  made  by 
the  Enforcement  Directorate  concerning  these  two  per- 
sons after  income  tax  searches.  The  substance  of  the 
omitted  portions  from  the  Reserve  Bank's  two  letters 
dated  6th  March,  1975  and  5th  July,  1975  was  to  the 
effect  : 

(i)  that  the  Reserve  Bank  was  aware  of  the  fact 
'  that  the  ex-ruler  of  Jaipur  had  owned  an 
agricultural  property  and  a  flat  in  U.K.  ;  ■ 


,w,,.,--v-v.;;;,..-;..  ■.;.-,  ■•_-■;.;-■ 


79 


,  (ii)  that  the  Reserve  Bank  was  informed  and  had 
due  knowledge  about  the  three  trusts  which 
had  been  created  in  U.S.A.,  U.K.  and 
Bahamas  by  the  late  ex-ruler  of  Jaipur  ; 

(iii)    the  Reserve  Bank  had  referred  the  matter  to 

the- Ministry  of  Finance,  Department  of  Eco- 
nomic Affairs,  Government  of  India,  as  far 
back  as  1969  through  their  D.O.  letters  Nos. 
EC.  CO.  FAS.   135/M(J-1)69  dated  31st 

:      July,  1969  to  Shri  Y.  T.  Shah  and  EC  CO. 

"  FAS.  71/12-72  dated  28th  April,  1972  to 
Shri  K.  Subramanian  and  that  the  Govern- 
ment's reply  to  these  two  letters  was  still 
awaited  and  the  Government  had  not  advised 
the  Reserve  Bank  what  stand  they  should 
take  in  regard  to  these  trusts. 

These  portions  from  the  two  letters  of  the  Reserve 
Bank,-I?  incorporated  in  the  material  that  was  compiled 
by  the  Deputy  Director  at  the  instance  of  the  Director 
General  of  Revenue  Intelligence  and  Investigation  and 
approved  by  the  Diiector  (Enforcement)  would  have 
shown  that  as  far  as  these  two  persons  are  concerned, 
they  bad  not  made  any  concealment  in  regard  to  the 
holdings  of  three  trusts  abroad  and  foreign  property 
owned  by  Lt.  Col.  Bhawani  Singh. 

•  7.211  Shri  A.  M.  Sinha,  Deputy  Director  has  stated 
in  his  statement  before  the  Commission  that  these  omis- 
sions .were  made  probably  at  the  instance  of  Shri 
Sawhney,  DGRI&I  who  wanted  only  the  relevant 
extracts  of  the  letters  and  such  portions  from  the  RBl's 
letters,  as  were  mentioned  to  him  were  included  by  him 
in  the  annexures  to  his  note  of  July  24,  1975."  Shri 
Sawhney  has  said  that  he  had  only  told  the  Deputy 
Director  to  process  the  material  with  reference  to  the 
relevant  extracts.  According"  to  Shri  Sawhney's  state- 
ment, 'relevant'  does  not  mean  that  whatever  is  relevant 
should  be  deleted  or  whatever  comes  in  their  favour 
should  be  deleted  and  this  he  could  not  have  meant. 
The  Commission  vjewsr  this  omission  with  grave 
concern. 


.  ,J.212  According  to  Shri  Sinha,  when  he  was  asked 
to  prepare  the  material,  he  was  not  told  by  any:o'ne 
that  the  material  was  being  compiled  with  a  view  to 
detain.  Smt.  Gayatri  Devi  and  Lt.  Col.  Bhawani  Singh. 
He  came  to  know  of  their  detention  later  lino  ugh  the 
television  news.  He  has  also  stated  that  in  the  fort- 
nightly report  for  August  he  did  not  include  these  cases 
as  although  these  two  persons  were  normally  residing 
in  the  Delhi  Zone  of  the  Enforcement  Directorate, 
proposals  for  their  detention  were  not  forwarded  by 
him.  The  Director  (Enforcement)  Shri  S.  B.  Jain  has 
also,  in  his  statement,  said  that  in  these  cases  the 
detention  orders  were  not  initiated  by  the  Enforcement 
Directorate.  The  DGRI&I  Shri  Sawhney  has-  also 
stated  that  he  had,  never  suggested  detention  in  these 
cases.;  According  to  him,  the  briefs  prepared  by  Shri 
Sinha  and  handed  over  to  him  did  not  amount  to- any 
proposallEor  detention  under  COFEPOSA  Act  but  were 
prepared  and  passed  oh  to  the  Ministry  of  Finance  in 
order  to  give  details  of  whatever  information  was  avail- 
able in  the  Enforcement  Directorate.  When  the  atten- 
tion of  Shri  Sawhney  was  drawn  to  some  of  the  notihgs 


in  the  files  of  the  Ministry  of  Finance  where  he  was 
referred  to  as  'sponsoring  authority'  for  these  deten- 
tions, his  reaction  was  that  they  had  not  initiated  the 
proposal  for  detention  and  reference  to  him  as  'spon- 
soring authority'  was  certainly  a  wrong  terms  to  use. 

7.213  The  headings  of  the  briefs  prepared  by  Shri 
Sinha  and  subsequently  endorsed  by  Shri  S.  B.  Jain, 
Director,  Enforcement  and  Shri  G.  S.  Sawhney, 
DGRI&I  also  show  that  the  notes  contained  informa- 
tion in  respect  of  'suspected  violations  of  foreign 
exchange'  and  did  not  at  all  indicate  that  these  were  in 
the  nature  of  proposals  to  the  Government  for  detaining, 
these  two  persons  under  the  COFEPOSA  Act. 

7.214  According  to  Shri  C.  T.  A.  Pillai,  Joint 
Secretary,  the  subject  of  detaining  Smt.  Gayatri'  Devi 
and  Lt.  Col.  Bhawani  Singh  was  discussed  in  the  room 
of  Shri  Pranab  Kumar  Mukherjee  on  24-7-1975  on 
the  basis  of  a  rough  note  with  the  Minister.  When  his 
personal  opinion  in  this  regard  was  asked  for,  he  had 
mentioned  that  on  the  basis  of  the  available  material 
it  seemed  to  him  to  be  a  marginal  case.  According  to 
Shri  Pillai,  from  the  trend  of  the  conversation  between 
the  Minister  and  the  Finance  Secretary,  he  got  the  im- 
pression that  the  question  of  detention  of  these  two 
persons  had  already  been  considered  and  decided  by 
the  Minister  in  consultation  with  the  senior  officials  or 
his  colleagues.  He  felt  that  he  had  been  called  in 
merely  to  complete  the  formalities  expeditiously. 

7.215  Shri  Pillai  has  further  stated  that  in  the  meet- 
ing, the  Minister  had  indicated  that  the  Intelligence 
Bureau  had  reported  that  Smt.  Gayatri  Devi  was 
already  in  or  near  Patna  and  may  skip  the  country. 
Hence,  orders  under  section  3(1)  and  declaration 
under  section  12A(2)  should  be  issued  straightaway, 
Shri  Pillai  thereafter  prepared  the  proposals  for  the 
detention  and  took  these  to  the  residence  of  Minister 
of  State,  Shri  Pranab  Kumar  Mukherjee  on  the  same 
date.  Shri  Mukherjee  passed  the  following  order  in 
the  case  of  Smt.  Gayatri  Devi : 

"I  am  satisfied  that  Smt.  Gayatri  Devi  should  be 
detained  as  proposed.  Ordered  accordingly. 
Declaration  may  also  issue." 

Similar  orders  were  also  passed  in  the  case  of  Lt.  Col. 

Bhawani  Singh. 

7.216  It  has  been  noticed  that  before  taking  a  deci- 
sion to  detain  these  two  persons  under  the  COFEPOSA 
Act  the  Minister  had  explored  the  possibility  of.  their 
arrest  under  the  Customs  and  Gold  Control  Acts  also. 
Some  gold  was  also  seized  by  the  Income  Tax  Depart- 
ment during  the  course  of  searches  made  by  it.  Shri 
M.  S.  Mehta,  the  then  Collector  o'f  Customs  and  Central 
Excise  at  Delhi,  who  was  consulted  in  this  connection 
by  the  Minister  did  not  think  that  the  material  before 
him  constituted  a  customs  case. 

7.217  In  the  process  of  executing  the  order,  the 
services  of  the  Home  Ministry  were  utilised.  Shri 
Narasimhan,  Joint  Secretary,  Home  Ministry  entrnsted 
the  work  to  one  Dy.  S.  P.  of  Delhi  Police — Shri  Harpal 


80 


Singh.  Though  in  the  meeting,  ^according  to  Shri 
C.  T.  A.  Pillai,  the  Minister  is  reported  to  have  stated 
that  Intelligence  Bureau  has  reported  that  Smt.  Gayatri 
Devi  was  already  in  or  near  Patna  and  may  skip"  the 
country,  Shri  Narasirrihan,  it  appears  was  never  told 
about  this  as  he  directed  Shri  Harpal  Singh  to  proceed 
to  Jaipur  (and  not  to  Patna)  to  execute  the  orders  of 
detention.  Shri  Harpal  Singh  returned  the  following 
day  and  reported  that  the  concerned  individuals  were 
not  available  in  Jaipur.  It  is  not  understood  as  to  why 
efforts  were  not  made  to  send  the  officer  for  executing 
the  order  to  Patna  if  Smt.  Gayatri  Devi  was  in  or  near 
Patna. 

7.218  Eventually,  the  two  persons  were  arrested  on 
30th  of  July  in  Delhi.  No  decision  was  taken  at  the 
time  of  the  issue  of  orders  about  the  Class  in  Jail 
where  these  persons  were  to  be  lodged.  A  note  dated 
1-8-1975  by  Shri  P.  C.  Jain,  Deputy  Secretary  in  the 
Ministry  of  Finance  in  File  No.  705/20/75-CUS.  IX 
shows  that  Shri  Narasimhan,  the  then  Joint  Secretary 
(IS)  informed  him  that  keeping  her  in  ordinary  Class 
might  invite  adverse  criticism  and  therefore  the  jail 
authorities  were  asked  to  treat  these  persons  as  'security 
prisoners'  and  classified  them  accordingly.  Subsequent- 
ly, orders  were  passed  prescribing  conditions  of  deten- 
tion giving  them  'A'  Class  in  the  Jail.  It  is,  however, 
pertinent  to  mention  that  Smt.  Gayatri  Devi  and  Lt. 
Col.  Bhawani  Singh  did  not  get  Class  'A*  in  jail  as 
there  was  no  such  class  in  male  and  female  ^Vards. 
Smt.  Gayatri  Devi  was  lodged  in  a  separate  room 
(Office  Room)  in  the  same  compound  where  other  'C 
Class  prisoners  were  residing.  Col.  Bhawani  Singh  was 
put  in  *H*  Class  Ward  and  was  given  facilities  of  'A' 
Class  prisoners  in  the  matter  of  provision  of  furniture, 
food  etc. 

7.219  In  ordering  the  detention  of  these  two  persons 
under  COFEPOSA  Act,  the  processes  and  procedures 
prescribed  by  the  Ministry  of  Finance  have  not  been 
followed.  In  this  connection  the  following  matters  need 
to  be  mentioned  : — 


(i)   Omission  to  refer \their  cases  to  the  Screening 
Comniittee. — A   Screening   Committee   was 
formed     at      the     Centre     consisting     of 
the    representatives    of    the    Ministry    of 
Finance     (Department    of    Revenue  ,  and 
Insurance),      Department      of     Personnel, 
Ministry  of  Law  and  Directorate  General  of 
Revenue  Intelligence  and  Investigation.    The 
functions  of  this  Committee  were  to  advise 
the  Government  or  the  officer  empowered  for 
issuing  detentions  under  section  3(1)  of  the 
COFEPOSA  Act,  1974  oh  the  desirability  of 
detaining  any  particular  person.    The  stan- 
dards applied  by  this  Committee,  it  appears 
were  quite  strict.  According  to  Shri  Sawhney, 
DGRI  &  I  who  was  a  Member  of  this  Com- 
mittee. "A  good  percentage  of  the  proposals 
that  came  before  the  Committee  for  detention 
under  COFEPOSA  Act  used  to  get  rejected". 
From    the  information    obtained  from    the 
Ministry  of  Finance  and  from  the  deposition 
of  witnesses  before  the  Commission,  it  has 


been  noticed  that  the  departure  from  the 
practice  of  referring  cases  to 
the  Screening  Committee  at 

the  time  of  first  detention  was  made  in  the 
case  of  these  two  persons  only.  Their  cases 
.  were  not  referred  to  such  Committee  even  for 
ex  post  facto  approval  by  rotation  of  files.  In 
reply  to  a  question  asked  during  the  course 
of  evidence  as  to  whether  if  these  two  cases 
had  been  brought  before  the  Screening  Com- 
mittee, the  Screening  Committee  might  have 
considered  the  matter  and  came  to  a  con- 
clusion that  this  was  not  a  case  in  which  the 
provisions  of  the  COFEPOSA  Act  should  bo 
enforced,  the  reply  of  Shri  Sawhney  was  that 
"this  is  quite  possible",  Shri  Pillai,  Joint  Sec- 
retary in  the  Ministry  of  Finance  has  .stated 
that  he  did  not  consider  it  necessary,  to  refer 
the  cases  to  the  Screening  Committee  "since 
the  Minister  had  already  made  up  his  mind, 
there  was  no  need  of  Screening  Committee's 
opinion". 

(ii)  •  Issue  of  Declaration  under  section  1 2  A  (2 ) 

Along  with  orders  under  section  3(1),  a  dec- 
laration under  section  12A(2)  waV  also 
issued  in  their  cases.  The  adverse  effect  to 
which  a  person  is  subjected  to  on  account  of 
issue  of  a  declaration  under  section  12  A  (21 
is  that  it  no  longer  remains  necessary  to  dis- 
close to  the  person  the  grounds  oh  which  the 
orders  have  been  made  and  to  refer  such 
cases  to  the  Advisory  Board,  which  at  the 
relevant  time  comprised  of  three  High  Court 
Judges.  In  the  case  of  these  two  persons,  no 
grounds  were  indicated  as  to  why  declarations 
under  section  12A(2)  were  necessary.  ■ 

(iii)  Four  monthly  reviews  under  section  12/4(2) 
of  the  COFEPOSA  Act.— .Another  safe- 
guard provided  in  the  Act  is  that 
in  those  cases  where  declarations  have  been 
,  issued  under  section  12A(2),  there  would  be 
four  monthly  reviews  to  decide  whether  de- 
tention of  such  persons  continued  to  be 
necessary  for  effectively  dealing  with;  the 
emergency.  In  the  case  of  these  two  persons, 
such  reviews  were  also  made  after  four 
months  but  these  seem  to  have  been  done  in 
a  routine  manner.  Shri  C.  T.  A.  Pillai's  ex- 
planation for  suggesting  continuance  of  such 
detention  on  two  occasions,  when  he  was 
still  looking  after  COFEPOSA  work,  is  that 
he  did  not  consider  it  necessary  to  put  up 
detailed  comments  in  this  matter  from  his  side  ■ 
"as  the  decision  to  detain  these  two  persons 
was  taken  by  the  Minister". 

(iv)  Review  in  terms  of  guidelines  issued  in  the 
iear  1976. — The  cases  of  such  persons 
were  also  not  reviewed  in  terms  of 
guidelines  issued  by  the  Government  vide 
Confidential  Circular  F.  No.  671/46/76- 
CUS.  VIII  dated  24th  November,  1976.  It 
was      stated  ■     in      this      circular     letter 


81 


that  all  the  relevant  material  against  the  per- 
son to  be  detained  has  to  be  carefully 
assessed  to  ensure  that  detention  orders  are 
based  on  grounds  which  are  adequate  and 
that  innocent  persons  are  not  victimised  and 
that  past  cases  should  also  be  examined  and 
recommended  for  review  by  the  concerned 
detaining  authority. 

'  7.220  A  very  striking  feature  concerning  these 
■arrests  seems  to  be  the  urgency  with  which  the  whole 
matter  was  processed  in  the  course  of  one  day — i.e. 
24th  July  1975  itself.  What  exactly  transpired  on 
24th  July  1975  which  necessitated  such  expeditious 
action  for  issue  of  orders  relating  to  arrest  remains 
unexplained  because  Shri  Pranab  Kumar  Mukherjee 
has  not  chosen  to  come  before  the  Commission  and 
give  evidence.  'I 

7.221  After  these  two  persons  were  arrested  and 
lodged  in  Tihar  Jail,  they  addressed  two  letters  dated 
22nd  August,  1975,  to  Deputy  Commissioner,  Delhi 
Administration,  Delhi,  who  forwarded  these  to  the 
Ministry  of  Finance  for  necessary  action.  A  request 
was  made  in  these  representations  for  release  from 
detention  mainly  on  health  grounds.  It  was  also  stated 
in  these  representations  that  these  persons  had  never 
indulged  in  any  anti-national  activities  or  smuggling 
activities  etc.  It  was  also  stated  by  Smt  Gayatri  Devi 
that  whatever  foreign  exchange  she  was  receiving 
through  trusts  abroad  was  fully  taxed  by  the  Indian 
Government  and  was  regularly  being  declared  by  her 
in  her  Annual  Wealth  Tax  and  Income  Tax  Returns. 

:  7.222  These  representations  were  examined  by  the 
Joint  Secretary,  Shri  C.  T.  A-  Pillai  on  September  7, 
1975  and  he  recorded  a  note  posing  whether  both  these 
persons  should  be  temporarily  released  for  a  period  of 
eight  weeks.  The  Finance  Secretary,  Dr.  H.  N.  Ray, 
endorsed  the- note  of  the  Joint  Secretary,  Mr.  Pillai,  on 
the  same  day  with" the  remarks  that  the  note  was 
recorded  by  Mr.  Pillai  in  consultation  with  Mr.  Ray. 
Thereafter  the  file  was  marked  to  MRE,  the  then 
Minister  of  Revenue  and  Expenditure,  Mr.  Pranab 
Kumar  Mukherjee.  Mr.  Pranab  Kumar  Mukherjee 
recorded  a  note  on  September  7,  1975  which  reads  as 
under : — 

"May  be  released  on  parole  as  proposed.    How- 
ever P.M.  may  kindly  like  to  see." 

7.223  Shri  Mukherjee  marked  this  note  to  P.M. 
The  Secret  Movement  Register  maintained  by  the  then 
Personal  Staff  of  the  Minister  of  Revenue  and  Expendi- 
ture, Shri  Pranab  Kumar  Mukherjee,  which  has  been 
put  up  before  the  Commission,  shows  that  the  relevant 
file  bearing  No.  686/100/75-CUS.  VIII/75  with  the 
notes  of  Shri  C.T.A.  Pillai  and  F.S.  indicating  the 
subject  "Representation  from  Smt.  Gayatri  Devi  and 
Shri  Bhawani  Singh"  was  marked  to  Shri  Dhawan, 
A.P.S.  to  P.M.  on  September  7,  1975  and  was  sent 
in  a  sealed  cover.  What  decision  was  taken  by  the 
Prime  Minister  in  this  matter  is  not  indicated  in  the 
file,  but  it  has  been  noticed  that  Shri  Pranab  Kumar 
Mukherjee  pasted  his  earlier  note  dated  September  7, 
1975  recommending  release  on  parole.  If  the  note 
sheet  page  is  put  against  bright  light,  the  noting  of 
S/39  HA/77— 12 


Shri  Pranab  Kumar  Mukherjee  reproduced  earlier  can 
be  easily  read.  This  file  was  put  up  before  the  Com- 
mission, Shri  CT.A.  Pillai  has  also  stated  in  his 
deposition  that  perhaps  at  the  time  of  first  parole,  the 
file  had  gone  to  the  Prime  Minister. 

7.224  After  pasting  his  earlier  note,  Shri  Mukherjee 
recorded  another  note  on  September  12,  1975  wherein 
he  ordered  the  rejection  of  the  request  regarding  the 
revocation  o'i  the  order  of  detention.  Since  Shri  Pranab 
Kumar  Mukherjee  has  not  chosen  to  appear  before  the 
Commission,  and  give  evidence  and  explain  the  various 
matters  attributable  to  him,  it  can  only  be  inferred  that 
his  subsequent  noting  rejecting  the  request  for  revoca- 
tion of  the  detention  order  may  have  been  on  the  advice 
of  the  P.M. 

7.225  Subsequent  to  rejection  of  their  request  on 
September  12,  1975,  these  persons  moved  applications 
for  release  on  parole  and  these  were  accepted.  Shri 
Bhawani  Singh  was  ordered  to  be  released  on  parole 
on  1st  November,  1975  and  Smt.  Gayatri  Devi  on  9th 
January,  1976.  It  has,  however,  been  noticed  lhat 
Smt.  Gayatri  Devi,  before  her  release,  addressed  a 
letter  to  the  Prime  Minister  dated  11th  December, 
1975  from  jail  which  reads  as  under  : — 

"As  the  International  Women's  Year  is  coming  to 
an  end,  may  1  take  this  opportunity  to  assure 
you,  Madam,  all  my  support  to  you  in  person 
and  your  programme  in  the  interest  and 
betterment  of  our  country.  May  I  also  add 
that  I  have  decided  to  give  up  politics  ever 
since  Rajaji's  demise  and  will  not  take  any 
further  interest  in  politics  as  the  Swatantra 
Party  has  already  defunct  and  I  have  decided 
not  to  join  any  political  party. 

In  view  of  what  I  have  stated  above,  as 
well  as  my  deteriorating  health,  in  spite-of 
the  medical  facilities  allowed  and  provided 
to  me,  may  I  request  you  for  gracious  con- 
siderations that  I  may  be  released.  If  there 
are  any  conditions  which  you  want  to  impose, 
I  will  try  to  abide  by." 

This  was  forwai'ded  to  the  Prime  Minister  through  Jail 
Superintendent  and  District  Magistrate,  Delhi,  on  16th 
December,  1975.  Tt  has  not  been  possible  for  the 
Commission  to  trace  this  letter  from  the  Prime  Minis- 
ter's Secretariat  and  find  out  what  orders  were  passed 
by  the  then  Prime  Minister  on  the  same. 

7.226  Before  her  release  on  parole,  the  authorities 
in  the  Ministry  of  Finance  also  seem  to  have  insisted 
that  her  request  should  be  granted  only  if  she  is  pre- 
pared to  withdraw  her  writ  petition  'challenging  her 
detention  etc'  pending  before  the  Delhi  High  Court. 
The  note  of  the  Joint  Secretary,  Shri  Pillai,  which  was 
approved  by  the  Minister,  Shri  Pranab  Kumar 
Mukherjee  dated  January  8,  1976  on  this  matter  reads 
as  below  : — 

"As  M(RE)  is  aware,  the  detention  of  Smt. 
Gayatri  Devi  has  been  challenged  in  writ 
proceedings  in  the  Delhi  High  Court.  It  is 
only  proper  that  if  her  request  for5  temporary 
release  is  acceded'  to,  we  insist  on  the  writ 


82 


petition  being  withdrawn.  On  informal 
enquiries  I  understand  that  the  petitioner 
would  be  willing  to  do  so." 

The  duration  of  parole  was  extended  from  time  to  time 
on  the  conditions  stipulated  at  the  time  of  initial  release. 
These  conditions  envisaged  residence  within  the  speci- 
fied places,  movement  outside  these  places  with  the 
consent  of  the  concerned  Collectors  of  Central  Excise,  ^ 
and  execution,  of  a  bond  with  surety  for  a  sum  of 
Rs.  50,000.  > 

7.227  The  matter  relating  to  the  revocation  of 
detention  order  finally  came  up  before  the  Review 
Committee  of  the  Department  of  Revenue  on  March  14, 
1977.  Before  putting  up  the  matter  to  the  Review 
Committee,  the  comments  of  the  then  Director  Enforce- 
ment, Shri  S.  B.  Jain,  were  called  for.  Though  Shri 
Jain  had  earlier  stated  that  he  is  not  concerned  with 
these  detentions,  at  this  time  he  made  a  positive  recom- 
mendation stating  that  the  detaining  authority  may  like 
to  consider  the  release  of  Shri  Bhawani  Singh  for  the 
time  being  and  the  case  of  Smt.  Gayatri  Devi  could  be 
considered  later  on.  The  Committee  considered  the 
nature  of  the  prejudicial  activities  attributed  to  the 
two  persons  and  felt  that  a  view  could  be  taken  for 
revocation  of  both  the  detention  orders  but  left  the 
matter  for  the  decision  of  the  Minister  'for  Revenue  and 
Banking.  Shri  Pranab  Kumar  Mukherjee  thereafter 
passed  the  following  order  on  March  19,  1977  : — ■ 

"Initially  Col.  Bhawani  Singh  may  be  released 
and  his  activities  kept  under  close  watch  and 
the  case  of  Smt.  Gayatri  Devi  may  be  decided 
after  some  time." 


Order  of  release  of  Smt.  Gayatri  Devi  was  passed  by 
the  Delhi  Administration  on  22nd  March  1977  after 
the  revocation  of  the  proclamation  of  emergency. 

7.228  The  manner  in  which  Smt.  Gayatri  Devi  was 
treated  in  the  jail  makes  a  very  poignant  reading.  She 
has  narrated  her  experience  in  the  jail  before  the 
Commission.  The  Assistant  Jail  Superintendent  has 
also  given  a  statement  in  this  regard.  She  was  not  at 
all, well  when  she  was  taken  to  the  jail  and  was  under 
medical  treatment  at  the  time  of  her  arrest.  According 
to  her,  the  conditions  in  Tihar  Jail  were  absolutely 
appalling;  there  was  complete  lack  of  sanitation,  no 
running  water,  the  public  latrines  had  failed  and  (here- 
fore  all  the  people  who  were  in  the  prison  had  to  use 
the  drain  to  ease  themselves.  Rajmata  Vijiya  Raje 
.  Scindia  of  Gwalior  was  also  brought  to  Tihar  Jail 
'  and  was  kept  in  a  'Phansi  Kothi',  (Cell  for  condemn- 
ed .  prisoners)  for  want  of  any  other  accommodation. 
This  cell  happened  to  be  next  to  the  room  where 
Smt.  Gayatri  Devi  was  living.  The  treatment  of  the 
women  prisoners  in  the  jail  was  not  at  all  good.  Even 
the  women  prisoners  who  were  pregnant  were  not 
treated  properly  so  much  so  that  one  of  the  ladies 
gave  birth  to  a  child  in  the  lavatory.  Smt.  Gayatri 
Devi  wrote  a  letter  to  the  Prime  Minister  at  the  ins- 
tance of  her  son  Jai  Singh,  who  advised  her  that  the 
only  way  of  getting  out  of  the  jail  was  to  write  a 
letter  to  the  Prime  Minister.  She  had  lost  10  Kgs 
m  weight  and  her  blood  pressure  was  very  low.  ' 


7^229  Shri  Pranab  Kumar  Mukherjee  was  issued 
a  notice  under  rule  5(2)  (a)  of  the  Commissions  of 
Inquiry  Rules.  He  declined  to  file  a  statement  as 
required  by  the  rules.  He  was  also  served  with  a 
summons  under  section  SB  of  the  Commissions  of 
Inquiries  Act.  He  refused  to  give  evidence  on  oath 
in  pursuance  of  the  summons  issued  under  section  8B 
of  the  Act. 

7.230  According  to  the  guidelines  issued  by  the 
Finance  Ministry,  the  COFEPOSA  Act  was-  intended 
to  be  applied  for  dealing  with  the  cases  of  smugglers, 
foreign  exchange  racketeers  or  such  foreign  exchange 
violations  as  were  having  a  nexus  with  smuggling.  It 
was  not  intended  to  be  resorted  to  for  dealing  .with 
minor  infractions  under  the  Foreign  Exchange  Regula- 
tion Act.  It  is  clear  on  the  basis  of  evidence  that 
has  been  brought  on  record  that  these  two  persons  had 
no  nexus  whatsoever  either  with  smuggling  or  with 
foreign  exchange  racketeering.  Shri  G.  S.  Sawhney, 
Director  General  of  Revenue  Intelligence  and  Investi- 
gation has,  during  the  course  of  his  statement  before 
tfie  Commission,  given  a  categorical  'no'  when  he  was 
asked  to  state  whether  he  had  any  reason  to  believe 
that  these  two  persons  belonged  to  any  organised  gang 
of  smugglers.  There  is  nothing  on  record  also  to  show 
their  connection  in  any  way  with  such  activities.  Thus 
it  is  abundantly  clear  that  in  the  cases  of  these  two 
persons,  the  provisions  of  the  COFEPOSA  Act  were 
not  at  all  applicable  and  these  were  resorted  to,  to 
give  effect  to  a  pre-determined  decision  to  arrest  these 
two  persons.  At  worst,  these  two  persons  may  have 
been  guilty  of  infractions  of  the  provisions'  of  the 
Foreign  Exchange  (Regulation)  Act,  for  which  pro- 
ceedings were  already  in  progress.  Such  infractions 
under  FERA  are  not  to  be  dealt  with  by  detentions 
under  the  COFEPOSA  Act,  as  was  done  in  the  cases 
of  these  two  individuals  in  utter  disregard  of  the  poli- 
cies and  guidelines  which  had  been  laid  down  by  the 
Finance  Ministry. 

7.231  It  is  thus  cleat  on -the -basis  of  evidence  that 
has  been  brought  on  record  that  Mr.  Pranab.  Kumar 
Mukheriee,  the  then  M:nister  of  Revenue  and  Banking 
has  misused  his  position  and  abused  his  authority  in 
ordering  the  detention  of  Smt.  Gayatri  Devi  and  Col. 
Bhawani  Singh  on  wholly  insufficient  grounds.  'It  is 
a  clear  case  of  subversion  of  lawful  processes  and  of 
administrative  procedures. 

17.  Detention  of  Shri  Bhim  Sen  Sachar  and  seven 
others. 

7.232  Shri  Bhim  Sen  Sachar,  aged  82,  veteran  free- 
dom fighter,  and  Ex-Governor  Andhra  Pradesh, 
Orissa,  Ex-High  Commissioner  of  India  in  Sri  Lanka 
and  Ex-Chief  Minister,  Punjab;  and  S/Shri  Sewak 
Ram,  Chairman,  Demi  Branch  of  the  Servants  of  the 
People  Society;  Vishnu  Datt,  Executive  Secretary,  Citi- 
zens for  Democracy;  K.  K.  Sinha,  Advocate,  Supreme 
Court;  S.  D.  Sharma  of  Indian  Service  Mission;  J.  K. 
Sharma,  Head  of  the  Philosophy  Department,  Hans 
Raj  College,  Delhi  University;  Krishan  Lai  Vaid,  Sar- 
vodaya  Worker;  and  J.  R.  Sahnj  of  Adhyatama 
Sadhna  Kendra,  all  around  or  above  60,  had  jointly 
addressed    an    open    letter   dated    July  23,  1975    to 


S3 


Smt.  Indira  Gandhi,  the  then  Prime  Minister  of  India. 
Some  extracts  from  that  letter  are  as  follows  : 

(2)  "We-  are  amongst  the  very  humble  of  your 
fellow  countrymen,  just  ordinary  citizens  in- 
terested cliiefly  in  constructive  work,  none 
of  us  belonging  to  any  political  party.  We 
have'  no  political  axe  to  grind  nor  are  we 
interested  in  any  political  office  or  power. 
Our  chief  interest  is  in  upholding  the  freedom 
and  dignity  of  the  individual." 

(3)  "We  regard  Pandit  Jawaharlal  Nehru  as  one 
of  the  Principal  architects  of  Indian  demo- 
cracy. He  used  to  say  'No  one,  however 
great  he  may  be,  should  be  above  criticism'. 
It  was  he  who  had  said  about  the  freedom 
of  the  press  : — 

'To  my  mind,  the  freedom  of  the  press  is  not 
just  a  slogan  from  the  larger  point  of  view 
but  it  is  an  essential  attribute  of  the  demo- 
cratic process.  I  have  no  doubt  that  even 
if>  the  Government  dislikes  the  liberties 
taken  by  the  press  and  considers  them 
dangerous,  it  is  wrong  to  interfere  with 
the  freedom  of  the  press.  By  imposing 
restriction  you  do  not  change  anything; 
you  merely  suppress  the  public  manifes- 
tation of  certain  tilings  thereby  causing  the 
idea  and  thought  underlying  them  to  spread 
further.  Therefore,  I  would  rather  have 
a  completely  free  Press  with  all  the  dan- 
gers involved  in  the  wrong  use  of  that 
freedom  than  a  suppressed  or  regulated 
press.' 

It  was  he  who  gave  the  memorable  slogan 
when  the  British  came  down  heavily  upon 
us  in  the  freedom  struggle  :  'Freedom  is  in 

peril,   defend   it  with   all  your  might'.   We 
sorrowfully  remember  him  for,  had  he  been 
alive  today,  we  have  no  doubt  that  he  would 
;  have   given   the   slogan  :•  'Democracy   is   in 

peril;  defend  with  all  your  might*." 

(6)  "We  do  not,  we  repeat,  challenge  your  right 
to  arm  yourself  with  additional  powers  even 
when  ample  powers  are  with  you  already 
for  dealing  with  offenders  against  law;'  what, 
however,  we  fail  to  appreciate  is  the  denial 
of  normal  opportunities  to  the  people — to 
all  the  people — to  discuss  openly  the  merits 
and  demerits  of  Government  measures.  Our 
democracy  is  not  yet  out  of  the  woods  and 
many  are  bound  to  feel  puzzled  over  what 
meets  their  eye." 

;    (7)  "... It  would  be  an  outrage  on 

■  ,  parliamentary  democracy  if  even  'our  Par- 
liament's proceedings  cannot  be  published 
without  pre-censorship: " 

(8)  " We  hope  with  all  our  heart 

that  the  arrested  members  of  Parliament  will 
not  be  deprived  of  the  opportunity  to  have 
S/39  HA/77— 13 


their  say  in  the  current  session  of  Parliament. 
Was  it  really  necessary  to  withhold  from 
the  public  even  the  names  of  the  political 
leaders  and  workers  you  have  arrested  and 
to  deny  facilities  to  their  near  and  dear  ones 
to  meet  them  and  arrange  their  legal  defence, 
if  any  such  defence  is  at  all  possible  in  the 
midst  of  present  ordinances " 

(9)  "Apart  from  your  political  supporters,  the 
common  people  of  Delhi  now  (alk  in  hushed 
tones  as  they  do  in  communist  societies;  they 
do  not  discuss  politics  in  the  coffee  house 
or  at  the  bus  stand  and  look  over  their 
shoulders  before  expressing  any  opinion.  An 
atmosphere  of  fear  and  political  repression 
prevails  and  politically  conscious  citizens 
differing  from  your  viewpoint  prefer  to  ob- 
serve a  discrete  silence,  with  some  of  them 
afraid  of  the  mid-night  knock  on  their  door." 

(10)  "Must  the  monster  of  Eef.r  devour  us  again, 
the  monster  for  the  annihilation  of  which  our 
beloved  leader  Pandit  Jawaharlal  Nehru  had 
sacrificed  his  all — his  riches,  his  comforts, 
his  parents  and  even  the  dearest  deity  of  his 
heart.  He  held  fear  to  be  enemy  No.  I  of 
India's  destiny.  |t  is  well  to  seek  fresh  ins- 
piration from  his  j  memorable  words  :  — 

'The  great  gift  for  an  individual  or  a  Nation, 
so  we  have  been  told  in  our  ancient 
books,  was  Abhaya  (fearlessness),  not 
merely  bodily  courajge  but  the  absence  of 
Tear  from  the  mind.  Janaka  and  Yajna- 
valka  had  said,  at  the  dawn  of  our  history 
that  it  was  the  function  of  the  leaders  of 
a  people  to  make  them  fearless.  But  the 
dominant  impulse  in  India  under  British 
rule  was  that  of  fear-perverse,  oppressing, 
strangling  fear;  fear  of  the  army,  the  police, 
the  widespread  secret  service;  fear  of  law 
meant  to  suppress,  It  was  against,  this 
all  pervading  fear  that  Gandhi's  quiet  and 
determined  voice  was  raised  : 


'Be  not  afraid'." 

(11)  "The  present  situation  looks  every  citizen 
in  the  face  enquiringly  and  the  old  surviving 
freedom  fighters  in  particulars.  We  must 
respond  to  the  call.  Accordingly,  we  pro- 
pose, with  effect  from  August  9,  1975  and. 
regardless  of  consequences  to  ourselves,  to 
advocate  openly  the  right  of  public  speech 
and  public  association  and  freedom  of  the 
Press,  for  discussing  the  merits  and  demerits 
of  the  Government  arming  itself  with  extra- 
ordinary powers.  The  intention  is  not  to 
embarrass  authority  or  to  cause  any  unneces- 
sary stir.  Our  self-suffering  will  just  be  an 
humble  offering  at  the  feet  of  the  Mother- 
land, in  the  breaking  of  whose  chains  we 
had  been  privileged  to  play  our  small  part 
inspired  'by  the  mighty  lead  of  the  Father  of 
the  Nation." 


84 


7.234  This  letter  was  received  in  the  P.M's  Secre- 
tarial and  is  available  in  their  file.  According  to  the 
affidavit  of  Mr.  S.  D.  Sharma  and  depositions  of 
S/Shri  Sewak  Ram  and  K.  K.  Sinha,  this  letter  was 
delivered  at  the  then  Prime  Minister's  House  on  July 
24,  1975.  Shri  Bhardwaj,  a  life  member  of  the 
Servants  of  People  Society  stated  before  the  Commis- 
sion that  he  himself  had  delivered  this  letter  at  the 
P.M's  house  on  July  24,  1975  and  obtained  an 
acknowledgement  dated  July  24,  1975  which  was  pro- 
duced, before  the  Commission.     Shri  Bhardwaj,  when 

•  asked  as  to  whom  the  letter  was  delivered,  replied 
"I  think  to  Mr,  Dhawan"  but  actually  it  had  been 
acknowledged  by  one  Mr.  M.  N.  Sharma,  who  was 
the  P.A.  in  the  Prime  Minister's  Establishment.  Shri 
Sharma  identified  his  signatures  and  confirmed  that  he 
had  received  the  copy  of  the  letter  and  signed  the 
receipt  on  the  day  on  which  the  letter  was  handed 
over  to  him.  It  is  seen  from  the  letter  that  it  was 
diarised  in  the  office  of  the  Secretary  to  the  Prime 
Minister.  From  the  alterations  made  in  the  date 
and  diary  number  of  this  letter,  clearly  visible  in  the 
letter,  it  appears  that  an  attempt  was  made  to  make 
the  date  appear  as  28th  instead  of  the  original  24th 
so  as  to  show  that  the  letter  was  received  after  these 
persons  had  been  detained. 

7.235  According  to  Shri  Sushi!  Kumar,  the  then 
D.M.,  Delhi  he  had  received  a  phone  call  from  Shri 
Dhawan  around  2,30  p.m.  on  July  24  or  25,  1975, 
to  go  over  to  the  P.M's  house,  Immediately  after  his 
arrival  at  the  P.M's  house,  he  was  also  joined 
by  Shri  Bhinder,  the  then  D.I.G.  Shri  Dhawan  told 
Shri  Sushil  Kumar  and  Shri  Bhinder  that  it  Bad  been 
decided  that  Shri  Bhim  Sen  Sachar  and  seven  others 
had  to  be  arrested  under  MIS  A.  The  relevant  ex- 
tract from  the  deposition' of  Shri  Sushil  Kumar  is 
reproduced  below  : — 

"Chairman  :  Were  the  other  names  given  to  you  ? 

,  '  Witness:  No,  Sir,  No  Sir.  Only  Mr.  Bhim  Sen 
Suchar's  name  was  mentioned  and  seven 
others.  I  asked  as  to  what  exactly  had 
happened.  Then  T  think  it  was  Mr.  Bhinder 
who  probably  mentioned  that  some  commu- 
nication had  been  circulated  to  the  Prime 
Minister.  This  about  all  that  was  mention- 
ed and  the  decision  has  been  taken  that  these 
people  should  be  arrested  under  MISA. 

Chairman:     Decision  taken  by  whom  ? 
Witness:     By  the  Prime  Minister,  Sir..:' " 


1  7.236  While  talks  among  these  three  were  going  on, 
Shri  Sanjay  Gandhi  walked  in  and  Shri  Dhawan  told 
him  what  he  had  been  telling  Shri  Sushil  Kumar  and 
Shri  Bhinder.  According  to  Shri  Sushil  Kumar,  the 
manner  in  which  Shri  Sanjay  Gandhi  reacted  to  what 
Shri  Dhawan  told  him  in  t3ie  presence  of  Shri  Sushil 
Kumar  and  Shri  Bhinder  about  the  directions  for  the 
arrest  of  Shri  Bhim  Sen  Sachar  and  seven  others,  give 
him  the  impression  that  Shri  Sanjay  Gandhi  knew  that 
such  a  decision  had  been  taken.  Shri  Sushil  Kumar 
told  Shri  Dhawan  that  the  latter  would  have  to  talk  to 
Shri  Krishan    Chand,  L.G-  to  obtain  his  clearance  for 


the  arrest  of  these  persons.  Shri  Dhawan  said  that  he 
would  talk  to  the  L.G.  Shri  Sushil  Kumar  also  stated 
that  Shri  Dhawan  had  assured  him  that  the  police 
authorities  would  take  care  of  the  material  required  for 
the  detentions  to  be  furnished  to  the  A.D.Ms  to  ena- 
ble the  A.D.Ms  to  issue  MISA  warrants.  There- 
after Shri  Sushil  Kumar  went  to  L.G.  The  L.G.  told 
him  that  he  had  been  informed  by  Shri  Dhawan'  about 
the  arrests  under  MISA  to  be  made,  and  that  Shri 
Sushil  Kumar  should  coiwey  this  decision  to  the 
A.D.Ms  Shri  Sushil  Kumar  thereafter  told  the 
A.D.Ms  that  as  soon  as  the  request  came  from  the 
police  authorities  for  detention  of  Shri  Sachar  and 
seven  others,  it  should  be  complied  with. 

7.237  Shri  Krishan  Chand,  in  his  deposition  before 
the  Commission,  has  stated  that  he  had  received  a 
call  on  RAX  telephone  from  Shri  Dhawan  on  July 
25.  Shri  Dhawan  told  him  that  the  Prime  Minister 
had  directed  that  Shri  Bhim  Sen  Sachar  and  others 
should  be  arrested  and  that  he  had  communicated  the 
orders  to  the  D.M.,  Delhi.  '  Shri  Sushil  Kumar  had 
also  told  him  that  he  was  called  to  the  P.M's' house 
and  was  told  by  Shri  Dhawan  that  these  persons  had 
to  be  arrested  because  they  had  written  some  letter 
against  the  Emergency.  To  the  query  made  by  the 
Commission  whether  it  was  correct  for  the  Commis- 
sion to  understand  that  directions  for  the  arrests  under 
MISA  were  passed  by  some  one  and  the  District 
Magistrate  carried  out  these  orders  through  the  Addi- 
tional. District  Magistrates,  who  were  merely  stamp- 
ing authorities  putting  down  their  signatures,  Shri 
Krishan  Chand  said  that  that  was  exactly  what 
happened  in  this  particular  case.  Shri  Krishan 
Chand  pleaded  that  his  mind  did  not  function  on  the 
propriety  regarding  these  arrests,  since  the  orders 
were  communicated  to  him  and  to  the  D.C.  in 
the  name  of  the  Prime  Minister.  Shri  Krishan  Chand 
snid  that  lie  was  absolutely  certain  that  the  P.M.  her- 
self had  passed  orders  for  the  arrest  of  these  persons 
because  he  felt  that  such  eminent  persons  couid  not 
be  detained  without  her  sanction, 

7.238  Accordingly,  Shri  P.  Ghosh,  the  then 
A.D.M.  (South)  issued  the  detention  orders  under 
MISA  in  respect  of  five  of  the  eight  persons,  namely, 
S/Shri  Sewak  Ram,  S.  D.  Sharma,  J.  K.  Sharma, 
Vishnu  Datt  and  K,  K,  Sinha.  In  his  written  state- 
ment given  to  the  Commission,  Shri  Ghosh  has  said 
that  the  detention  orders  were  issued  on  the  specific 
directions  of  the  D.M.,  who  had  stated  that  it  was 
the  wish  of  the  Prime  Minister.  In  his  deposition 
Shri  Ghosh  has  said  that  the  detention  orders  were 
issued  even  before  the  receipt  of  the  material  from 
the  police.  Actually,  the  material  was  received  by 
the  A.D.M.  after  the  warrants  had  been  issued  but 
was  sent  pre-dated  by  the  police.  Therefore,  there 
was  no  question  of  any  satisfaction  by  the  detaining 
authority  on  the  material  placed  before  him.  This 
A.D.M.  in  his  deposition  also  stated  that  in  a  large 
number  of  cases  of  detentions  under  MISA  in  Delhi 
the  material  on  the  basis  of  which  detentions  were 
made,  was  received  subsequent  to  the  issuance  of 
the  warrants  of  detentions  ;  and,  such  as,  there  was 
no  question  of  satisfaction  of  the  detaining  authority 
as  contemplated  in  section  3  of  the  Act. 


85 


•  7.239  Smt.  Meenakshi  Dutta  Ghosh,  who  had  issu- 
ed the  detention  order  against  Shri  Bhim  Sen  Sachar 
has  also  stated  in  her  written  statement  to  the  Com- 
mission that  the  order  was  issued  on  the  specific  direc- 
tions of  the  D.M.,  Delhi  who  had  stated  that  it  was 
the  P.M's  wish.  She  has  also  stated  that  the  grounds 
for  the  detention  of  Shri  Sachar  were  received  after 
the  warrant  had  been  issued  and  were  sent  pre-dated 
by  the  police.  She  admitted  that  she  had  not  applied 
her  mind  to  the  grounds.  Shri  S.  L.  Arora  and  Shri 
Ashok  Pradhan  who  had  issued  detention  orders 
against  Shri  J.  K.  Sharma  and  Shri  Krishan  Lai  Vaid 
respectively  have  also  stated  that  these  detention 
orders  were  issued  under  the  directions  of  the  D.3V1., 
Delhi,  who  told  them  that  a  decision  to  detain  these 
persons  under  MIS  A  had  been  taken.  AH  the 
A.D.Ms,  have  frankly  stated  that  there  was  no -ques- 
tion of  their  feeling  satisfied  about  the  grounds  of 
detentions. 

7.240  The  Commission  has  observed  that  the  prac- 
tice of  issuing  warrants  of  arrest,  first  and  obtaining 
the  pre-dated  grounds  of  detentions  thereafter  had 
become  the  general  pattern  so  far  as  the  detentions  of 
persons  under  MISA  in  Delhi  during  emergency  were 
concerned. 

7.241  Shri  Blunder,  as  usual,  has  totally  denied  his' 
presence  in  t'he  Prime  Minister's  house,  as  stated  by 
Shri  Sushil  Kumar.  However,  Shri  Prakash  Singh, 
the  then  S.P.  (North)  has  deposed  before  the  Com- 
mission that  he  hadjnoved-the-proposal  for  the  deten- 
tion "of  Shri  J.  K.  Sharma,  one  of  the  signatories  of 
the  letter  after  Shri  Bhinder.had  ordered  him  to  this 
effect  on  telephone  and  also  communicated  to  him  the 
name,  address  and  grounds  for  the  detention  of  Shri 
J  K.  Sharma.  According  to  Shri  Prakash  Singh, 
Shri  Bhinder  had  also  told  him  that  decision  in  this 
regard  was  taken  at  a  higher  level. 

7.242  The  grounds  of  detention  compiled  by  the 
police  against  all  these  eight  persons  and  furnished  to 
the  A.D.Ms,  show  that  except  in  the  case  of  Shri 
Krishan  Lai  Vaid  the  grounds  were  drafted  almost 
entirely  from  the  open  letter  addressed  by  these  per- 
sons to  Smt.  Gandhi  by  distorting  the  thoughts  set 
out  in  the  letter.  Reports  on  the  activities  of  these 
persons  received  from  the  C.I.D.,  Special  Branch, 
Delhi  Police,  revealed  no  worthwhile  material  in  res- 
pect of  these  persons  which  could  be  interpreted  as 
prejudicial  to  the  security  .  of  the  State  and 
justify  detention  of  any  of  these  persons  under  MISA, 
It  is  clear  that  these  persons  were  detained  for  having 
written  an  open  letter  to  the  then  Prime  Minister 
though  the  contents  of  the  letter  by  themselves  do  not 
constitute  adequate  enough  grounds  to  warrant  their 
detention  under  MISA.  These  detention  orders  were 
executed  on  25/26th  of  July  and  all  of  them  except 
Shri  Krishan  Lai  Vaid  were  transferred  to  the  Central 
Jail,  Ambala  on  the  26th  of  July,  1975,  which  added 
hardships  to  the  family  members  of  the  detenues  in 
the  sense  that  their  family  members  could  not  avail 

of  the  facilities  of  weekly  interviews  with  the  detenues 
without  incurring  considerable  expenditure  and  under- 
going strains  of  journeys.  The  Lt.  Governor,  Delhi, 
confirmed  the  detention  orders  in  respect  of     Shri 


J.  K.  Sharma  on  the  30th  of  July,  1975,  Shri  Krishan 
Lai  Vaid  on  1st  August,  1975  and  Shri  Bhim  Sen 
Sachar  and  others  on  3rd  August,  1975. 

7.243  The  wife  of  Mr.  Bhim  Sen  Sachar  filed  a 
writ  petition  in  the  High  Court  of  Delhi  on  the  6th 
August,  1975  challenging  the  detention  of  her  husband.. 
The  detention  orders  against  Mr.  Bhim  Sen  Sachar  were 
revoked  by  the  Lt.  Governor  on  31st  August,  1975, 
.one  day  before  the  date  fixed  for  hearing  in  the  High 
iCourt  of  the  writ  petition  filed  by  the  wife  of  Shri 
Bhim  Sen  Sachar.     The  detention  orders  in  respect 

•  joE  Shri  Sewak  Ram  were  also     revoked     on     31st 
August,  1975. 

7.244  It  is  not  understood  why  the  remaining  six 
detenues,  all  of  whom  were  arrested  along  with  Shri 
Sachar  and  Shri  Sewak  Ram  were  not  released  along 
with-  these  two.  Shri  Krishan  Chand  has  stated  in 
this  connection  that  in  all  matters  relating  to  these 
detentions,  viz.,  issuance  of  detention  orders,  confir- 
mation and  release,  he  was  acting  under  the  instruc- 
tions of  the  then  P.M.  and  if  it  had  been  on  his  own 
volition,  he  would  have  released  the  remaining  six 
detenues  also  when  M/s.  Bhim  Sen  Sachar  and  Sewak 
Ram  were  released.  Shri  Vishnu  Datt  suffered  a 
severe  heart  attack  on  14th  July,  1975  and  in  view  of 
his  serious  condition  the  detention  orders  against  him 
were  also  revoked  by  the  Lt.  Governor  on  September 
16,  1975.  Shri  Krishan  Lai  Vaid,  Shri  K.  K.  Sinha, 
Shri  J.  R.  Sahni,  Shri  J.  K.  Sharma  and  Shri  S.  D. 
Sharma  suffered  detention  till  2nd  of  April,  1976. 
Their  cases  were  reviewed  mechanically  during  this 
period  at  the  time  of  four-monthly  reviews  and  the 
Lt.  Governor  affirmed  their  continued  detention  every 
time.  On  2nd  of  April,  1976,  the  Lt.  Governor 
approved  the  proposal  to  revoke  the  detention  orders 
against  the  remaining  five  persons. 

7.245  The  story  of  detention  of  Shri  Bhim  Sen 
Sachar  and  seven  others  provides  a  classic  example 
of  the  misuse  of  the  provisions  of  MISA.  The  manner 
in  which  the  police  and  the  Magistrates  went  about 
compiling  grounds  and  issuing  the  detention  orders, 
should  be  a  warning  to  any  Government  against  giv- 
ing such  vast  and  arbitrary  powers  in  the  hands  of 
authorities  without  providing  effective  and  compell- 
ing safeguards  against  their  possible  misuse.  This 
and  similar  cases  which  have  come  to  the  notice  of 
the  Commission  reveal  an  undesirable  trend  in  the 
administration  of  the  Maintenance  of  Internal  Secu- 
rity Act  in  the  sense  that  when,  as  in  this' case,  the 
Prime  Minister  felt  satisfied  about  the  detention  of 
certain  persons,  instead  of  getting  the  orders  issued 
by  the  Central  Government,  small  functionaries  like 
the  Additional  District  Magistrates  were  directed  to 
issue  the  warrants  without  they  themselves  being  satis- . 
fied  either  about  the  need  for  detentions  of  the  indi- 
viduals concerned  or  the  adequacy  of  grounds  for 
their  detention. 

7.246  A  notice  under  rule  5(2)  (a),  of  the  Com- 
missions of  Inquiry  Rules  and  a  summons  under  sec- 
tion 8B  of  the  Commissions  of  Inquiry  Act  were  issu- 
ed to  Mrs.  Gandhi  and  Mr.  R.  K.  Dhawan  in  tfiis 
case.     Smt.     Gandhi  did  not  respond  to  the  notice. 


86 


When  she,  however,  turned  jup  in  response  to  the 
summons  under  Section  SB,  she  refused  to  take  the 
oath  and  tender  evidence.  Shri  R.  K.  Dhawan  res- 
ponded to  the  summons  under  section  8B  and  led 
evidence.  Shri  Dhawan  has  stated  that  at  about  1.30 
or  2.00  p.m.  on  the  day  of  the  arrest  of  Shri  Bhim 
Sen  Sachar,  Shri  Sushi!  Kumar  had  gone  to  him  and 
told  him  that  they,  thereby  meaning  L.G.  and  the 
detaining  authorities,  had  taken  a  decision  to  detain 
8  persons  including  Shri  Bhim  Sen  Sachar  because 
"the  C.l.D.  had  intercepted  some  letter  written  by 
Shri  Bhim  Sen  Sachar  and  they  had  apprehension  that 
this  will  serve  some  sort  of  a  think  in  Delhi  and  they 
wanted  to  arrest  all  the  persons".  The  L.G.  warned 
this  to  be  brought  to  the  notice  of  the  Prime  Minister 
and  ascertained  whether  she  wanted  any  distinction 
to  be  made  in  the  case  of  Shri  Bhim  Sen  Sachar  or 
not.  According  to  Shri  Dhawan  he  had  consulted 
the  Prime  Minister  and  conveyed  to  Shri  Sushi] 
Kumar  her  reaction  that  it  was  a  matter  for  the  L.G. 
and  the  Delhi  Administration  to  decide  and  that  she 
had  nothing  to  do  with  it.  In  reply  to  a  specific 
query  from  the  Commission,  Shri  Dhawan  stated  that 
the  P.M.  did  not  express  any  surprise  about  the  con- 
tents of  tht  letter.  The  relevant  extract  from  the 
deposition  of  Shri  Dhawan  on  this  point  is  reproduced 
below  : — 

"Chairman  :  (Towards  Mr.  Dhawan)  Now,  did 
vou  come  to  know  when  Mr.  Sushil  Kumar 
came  to.  you.  Did  you  know  that  a  letter 
.  was  addressed  by  Mr.  Bhim  Sen  Sachar  and 
seven  others  to  the  Prime  Minister,  before 
that  date  ? 

Witness:     No,  I  did  not  know. 

Chairman:     Before  that  time  ? 

Witness:     No,  I  did  not  come  to  know. 

Chairman:  Did  the  Prime  Minister  know  about 
such  a  letter  having  been  received  ? 

Witness:  When  I  mentioned  it  to  her  that  this 
is..... ....She  said  that  is  for  the  Delhi  Ad- 
ministration, so  I  did  not  ask  her. 

Chairman:  I  just  want  to  know.  Did  she  ex- 
press any  surprise  about  the  contents  of  the 
letter  of  what  the  letter  was  about.  What 
was  written  in  that  letter 

Witness:     No,  she  did  not  tell  anything. 

Chairman:  So,  from  that  it  appeared  that  a 
letter  had  been  received. 

Witness:     Yes.".  '    ' 

7.247  Shri  Dhawan  also  confirmed  that  he  had  also 
spoken  to  the  L.G.  when  the  L.G.  had  rung  up  in 
some  connection  and  told  him  that  the  D.C  had  gone 
to  Shri  Dhawan  in  this  connection  and  the  P.M.  had 
said  that  "It  is  none  for  me  to  decide.  It  is  for  Delhi 
Administration  to  decide", 

7.248  The  defence  tendered  by  Shri  Dhawan  is  not 
convincing.  There  is  conclusive  evidence  to  show 
that  the  letter  was  delivered  at  the  PM's  house  on  Tulv 

24.  1975,  by  Shri  Bhardwaj,  a  Life  Member  of  thr 


Servants  of  the  People  Society.  There  had  been  an 
effort  made  to  tamper  with  the  date  and  diary,  num- 
ber of  the  letter  so  as  to  make  it  appear  that  the  date 
of  receipt  was  28th  and  not  24th.  Shri  Dhawan  nas 
taken  the  defence  that  the  detention  was  a  sequel  to 
a  copy  of  the  said  letter  coming  to  the  notice  of  the 
Delhi  Administration  through  interception.  This 
theory  is  also  not  tenable.  It  is  difficult  to  believe 
that  the  letter  coming  to  the  notice  of  the  authorities 
through  interception  on  July  25  could  have  led  to  such 
prompt  action  by  way  of  detention  under  MISA  on 
25th  itself  against  Shri  Sachar  and  six  others  and  od 
the  26th  morning  against  the  remaining  one.  This 
interception  theory  which  has  evidently  been  thought 
of  as  a  foil  against  any  possible  criticism  against  the 
then  Prime  Minister,  stands  completely  demolished 
from  the  replies  to  the  questions  put  to  Shri  Sushil 
Kumar  and  Shri  Krishan  Chand  by  the  counsel  for 
the  Commission  in  this  connection.  Shri  Krishan 
Chand  has  said  that  he  had  come  to  know  for  the  .first 
time  when  Shri  Dhawan  telephoned  him  that  the  then 
Prime  Minister  had  directed  that  Shri  Bhim  Sen 
Sachar  and  others  should  be  arrested  and  that  prior 
to  that  moment  of  time,  no  so-called  interception  of 
this  letter  had  ever  come  to  his  notice.  Shri  Sushil 
Kumar  has  also  confirmed  that  prior  to  his  meeting 
with  Shri  Dhawan,  he  did  not  know  of  the  existence 
of  any  letter  written  by  these  persons  to  the  then  Prime 
Minister.  ". 

7.249  There  is  yet  one  more  infirmity  in  the  theory 
of  this  interception.  The  Commission  in  the  course 
of  examining  the  Superintendent  of  Police,  C.l.D, 
Shri  K.  S.  Bajwa,  brought  out  that  on  the  day  the 
copy  of  the  letter  was  purported  to  have  been  inter- 
cepted, the  C.l.D.  did  not  enjoy  any  authority  to 
intercept  that  letter.  However,  an  order  was  pass- 
ed by  the  Government  o'n  August  4,  1975,  with  re- 
trospective effect  covering  the  period  from  July  J, 
1975,  onwards. 

7.250  In  the  light  of  the  evidence  brought  on 
record,  the  Commission  feels  that  the  decision  to 
detain  Shri  Bhim  Sen  Sachar  and  seven  others  was 
taken  by  Smt,  Gandhi  which  she  got  conveyed  to 
the  authorities  in  Delhi  Administration  through  Shri 
Dhawan.  The  only  fault  of  these  eight  gentlemen 
appears  to  have  been  the  open  letter  that  they  had 
addressed  to  Smt.  Gandhi.  Prima  facie  the  con- 
tents of  the  letter  do  not  warrant  the  authors  oT  the 
letter  to  be  detained  under  .  MISA.  Smt.  Indira 
Gandhi  has  abused  her  position  and  misused  her 
power  in  ordering  the  arrest  of  Shri  Bhim  Sen  Sachar 
and  seven  others. 

1 8.  Improprieties  committed  in  regard  to  Shri  Mangal 
Beliari,  IAS  of  Rajasihan  Cadre ;  and  termina- 
tion of  the  services  of  Smt.  Chandrawati 
Sharma,  Assistant  Teacher. 

7.251  On  August  20,  1975,  the  Chief  Secretary, 
Rajasthan,  initiated  the  following  actions  ; — 

(a)  A  top  secret  d.o.  letter  No,  5993/CS/l, 
dated  August  20,  1975  was  addressed  to 
District  Magistrate,  Jaipur,  desiring  that 
Shri  S,  N.  Sharma,  Advocate,  be  detained 


87 


under  MISA  on  certain  grounds  mentioned 
therein; 

(b)  A  top  secret  note  was  sent  to  the  Education 
Commissioner  to  the  effect  that  the  Univer- 
sity may  be  asked  to  terminate  the  services 
of  Smt.  Chandrawati  Sharma,  because  on 
information  received,  the  Government  was 
.  satisfied  that  she  was  an  active  follower  of 
Anand  Marg  and  her  continuance  in  service 
was  not  desirable  in  the  interest  of  the  Uni- 
versity or  of  the  public; 

(c)  A  top  secret  d.o.  letter  dated  August  20, 
1975  was  addressed  to  the  Inspector-Gene- 
ral of  Police,  Rajasthan  for  initiating  inquiry 
into  the  conduct  of  Shri  Gaur,  Additional 
Superintendent  ot  Police,  Jaipur; 

(d)  Shri  Mangal  Behari,  IAS,  the  then  Mem- 
ber, Board  of  Revenue,  Rajasthan,  was  told 
on  20th  August,  1975  to  apply  for  leave. 

7.252  Pursuant  to  the  d.o.  letter  of  the  Chief  Sec- 
retary dated  August  20,  1975,  the  District  Magistrate, 
Jaipur,  detained  Shri  S.  N.  Sharma,  under  MISA  on 
the  same  day.  The  detention  orders  were  confirmed 
by  the  State  Government  with  the  approval  of  the 
Chief  Minister  subsequently, 

7.253  On  receipt  of  the  top  secret  Note  concerning 
Smt.  Chandrawati  Sharma,  the  Education  Commis- 
sioner, sent  instructions  to  the  Joint  Director 
(Women),  Jaipur — Ajmer  Range,  through  a  letter 
dated  August  23,  1975  : — 

"On  '  the  basis  of  information  received  the 
■t,  Government  is  satisfied  that  Smt.  Chandra 
Sharma  w/o  Shri  S.  N.  Sharma, 
Advocate,  *  *  *  who  is  working  as 
Assistant  Teacher,  in  Maharaja  Girls  Higher 
Secondary  School,  Jaipur  is  actively 
associated  with  'an  organisation  declared 
illegal  and  her  continuance  in  service  is  not 
desirable  in  public  interest. 

•  "You  are,  therefore,  requested  to  terminate  her 
services  forthwith,  under  intimation  to  the 
undersigned." 

On  August  23,  1975,  the  Joint  Director,  accordingly 
terminated  the  services  of  Smt.  Chandrawati  Sharma 
with  immediate  effect  and  informed  all  concerned,  in- 
cluding the  Education  Commissioner  in  that  behalf. 

7.254  Pursuant  to  a  letter  dated  August  20,  1975 
addressed  to  the  Inspector  General  of  Police,  Rajas- 
than,  inquiry  was  conducted  against  Shri  R.  N.  Gaur. 
A  report  was  received  from  the  Inspector-General  of 
Police  on  September  3,  1975  exonerating  him. 

7.255  Shri  Mangal  Behari  was  also  asked  on  the 
20th  of  August,  1975  by  the  Chief  Secretary  to  go  on 
leave. 

7.256  All  this  action  simultaneously  taken  against 
three  public  servants  and  Shti  S.  N.  Sharma  Advocate, 
Was  because  of  an  intimation  received  from  Shri  R.  K. 
Dhawan,   Additional  Private  Secretary  to  the  then 

S/39  HA/77— 14 


Prime  Minister  of  India  earlier  in  the  morning  of 
that  day  on  phone. 

7.257  Shri  Harideo  Joshi,  the  then  Chief  Minister 
of  Rajasthan  has  deposed  that  he  received  a  tele- 
phonic message  on  August  20,  1975  from  Shri  R.  K. 
Dhawan,  Additional  Private  Secretary  to  the  then 
Prime  Minister  .and  that  he  conveyed  certain  infor- 
mation. He  stated  that  he  recorded  the  information 
conveyed  to  him  in  Hindi  on  a  slip  of  paper  and, 
thereafter,  he  recorded  the  note  in  English,  after 
discussion  with  his  officers,  to  the  following. effect:  — 

"Shri  R.  K.  Dhawan,  Private  Secretary  to  the 
Prime  Minister  rang  me  up  to  convey  the 
following: — 

1.  Shri  S.  N.  Sharma,  Advocate,  74-Sarojini 

Marg,  Jaipur,  is  reported  to  have  burnt 
records     relating  to  his     and  his  wife's 
,  activities   as   followers   of  Anand   Marg, 

Shri  R.  N.  Gaur,  Addl.  S.P.,  in  spite  of 
being  informed  about  the  burning  of  re- 
cords, did  not  reach  in  time  and  allowed 
the  records  to  be  burnt.  It  was  desired 
that  Shri  S.  N.  Sharma  should  be  detain- 
ed under  MISA. 

2.  His  wife  Shrimati  Chandra  Sharma,   Lec- 

turer in  Maharani's  College,  Jaipur, 
should  be  removed  from  service. 

3.  An  enquiry  should  be  conducted  immedia- 

tely in  the  conduct  of  Shri  Gaur. 

2.  It  was  also  desired  that  Shri  Mangal  Behari 
IAS  should  also  be  relieved  from  service. 

"Please  take  necessary  action. 

Sd  :  Harideo  Joshi 
20-8-75. 
Chief  Minister,  Rajasthan." 

7.258  After  Shri  Harideo  Joshi,  then  Chief  Minister 
communicated  the  information  received  from  Delhi 
to  the  Chief  Secretary,  an  order  of  detention  was 
passed  against  Shri  S,  N.  Sharma  under  MISA  on 
August  20,  1975.  Shri  G.  Ramachandra,  the  then 
Collector  and  District  Magistrate,  Jaipur,  has  stated 
that  from  the  letter  of  the  Chief  Secretary  it  was  "very 
clear  that  no  discretion  was  left  with  me  in  not  arrest- 
ing Shri  S.  N.  Sharma.  In  spite  of  this  order,  before 
passing  the  order  of  detention,  I  had  before  me  the 
report  from  District  Superintendent  of  Police,  Jaipur.,,, 
requesting  his  detention  under  MISA.  Before  pass- 
ing the  order  of  detention,  this  report  was  also  in  my 
view." 

7.259  There  was,  it  appears,  evidence  before  the 
District  Magistrate,  received  through  proper  channels, 
that  Shri  S.  N.  Sharma  had  joined  Anand  Marg  in 
1963  and  had  since  then  been  meditating  regularly  on 
the  lines  of  Anand  Marg,  and  that  he  had  been  widely 
advocating  for  the  Anand  Marg  when  the  Govern- 
ment of  India  had  banned  that  organisation;  and 
hence  his  activities  had  posed  a  threat  to  the  internal 


m 


security.. of  the.  country,  The  Station  House  Officer 
also  recommended  the  detention  of  Shri  S.  N.  Sharma 
under  M1SA.  on  the  above  grounds.  The  report, 
which  originated  from  the  Police  Station  on  August  20, 
1975  reached  the  District  Magistrate  through  two 
intermediaries  on  the  same  day.  The  d.o.  letter  ,of 
the  Chief  Secretary  addressed  to  the  District  Magistrate 
desiring  detention  of  Shri  S,  N.  Sharma  under  MISA 
also  reached  the  D.M.  on  August  20,  1975.  Shri 
R..  K.  Dhawan's  instructions  to  the  Chief  Minister 
were  also  received  on  August  20,  1975. 

7.260  The  proceedings  for  detention  do  disclose  an 
extraordinary  expedition  in  the  implementation  of 
the  order  received  from  Delhi  through  the  local  chan- 
nels. An  order  intimated  by  the  Additional  Private 
Secretary  of  the  Prime  Minister  to  the  Chief  Minister 
and  communicated  by  the  Chief  Minister  to  the  Chief 
Secretary  was  implemented  on  the  same  day.  Sines, 
however,  there  was  evidence  before  the  authorities  on 
which  action  under  MISA  could  be  taken,  the  Com- 
mission did  not  find  that  there  was  any  evidence  to 
establish  that  there  was  misuse  of  power  or  abuse  of 
authority  in  the  arrest  and  detention  of  Shri  S.  N. 
Sharma.  It  may,  however,  be  observed  that  the 
action  for  arrest  and  detention  of  Shri  S.  N.  Sharma 
under  MISA  was  directed  from  Delhi  by  the  Addition- 
al Private  Secretary  speaking  on  behalf  of  the  Prime 
Minister  Smt.  Gandhi  on  the  20th  of  August,  1975, 

■  on  phone  to  the  Chief  Minister.  It  was  communica- 
ted to  the  Chief  Secretary  on  the  same  day  and  tlte 
official  .machinery  went  into  immediate  action  and  the 
order  was  implemented  and  the  arrest  and  detention 
of  Shri  S.  N.  Sharma  were  effected  on  the  very  same 
day.  In  coming  to  the  conclusion  that  there  is  no 
proof  of  abuse  of  authority  or  misuse  of  power  in 
the  arrest  and  detention  of  Shri  S.  N.  Sharma,  the 
Commission  is  impressed  by  the  circumstances  that 
on  August  14,  1975,  the  Joint  Secretary  in  the  Ministry 
of  Home  Affairs,  New  Delhi,  had  forwarded  the  name 
of  certain  persons  who  were  active  in  the  Anand  Marg 
Organisation,  which  was  a  banned  organisation  in  the 
State  of  Raiasthan  and  it  was  recommended  that 
efforts  should  be  made .  to  arrest  those  persons  who 
were  still  at  large.  The  name  of  Shri  S.  N.  Sharma 
was  included  in  the  list  sent  by  the  Ministry  of  Home 
Affairs. 

7.261  Smt.  Chandrawati  Sharma  was  an  employee 
of  the  Education  Department  in  the  Girls  School  at 
Jaipur.  Her  name  was  not  included  in  the  list  of 
Anand  Margis  furnished  by  the  Ministry  of  Home 
Affairs.  It  appears,  however,  that  the  Home  Com- 
missioner of  the  State  Government  of  Rajasfhan    had 

'addressed  a  d.ol  letter  to  the  Inspector  General  of 
Police  on  August  19,  1975,  for  his  .comments  on  the 
list  dated  August  14,  1975  received  from  the  Ministry 
of  Home  Affairs.  The  Inspector  General  of  Police 
sent  a  reply  to  the  Home  Commissioner  giving  prog- 
ress report  of  arrests  of  activities  of.  banned  organisa- 
tions and  this  report  also  does  not  refer  to  Smt.  Sharma. 
Action  was  taken  against  Smt.  Sharma,  therefore,  not 
at  the  instance  of-  the  Home  Commissioner:  but  only 
on  the  instructions  received  from  the  Chief  Secretary 
by  the  Joint  Director  (Women)  Jaipur.  The  instruc- 
tions for  termination  of  the  services  of  Smt.  Sharma 
clearly  emanated  from  the  Chief  Minister,     who  had 


received,  orders,.. in  that  behalf  frpni'.  Shri  R-  K. . 
Dhawan.  The  records  of  the  State  Government  show 
that  Smt.  Chandrawati  Sharma.  sought  interview  with 
the  Education  Commissioner  on  more  than  one  occa- 
sion after  the  termination  of  her  services  and  tried  to 
impress  upon  him  verbally  as  well  as  through  written 
representations  that  she  had  been  made  a  victim  of 
personal  animosity  between  her  husband  and  their 
landlord,  Shri  B.  B.  Gupta.  She  also  produced  a 
letter  from  Shri  B.  B.  Gupta,  the  landlord,  in  support 
of  her  contention.  The  Education  Commissioner 
brought  this  matter  to  the  notice  of  the  Chief 
Secretary. 

7.262  Smt,  Chandrawati  Sharma  has  stated  before 
the  Commission  that  she  felt  that  Kumari  Pushpa 
Khanna  who  lived  with  Professor  B.  B.  Gupta  and 
was  "connected"  with  him  may  have  had  a  hand  in 
complaining  against -her  at  "the'  Centre  through  one 
Shri  P.  N.  Katju  who  also  lives  in  their  locality  and 
who  is  on  visiting  terms  with  Smt.  Gandhi.  Kumari 
Pushpa  Khanna  is  also  quite  close  to  Shri  P.  N,  Katju. 

7.263  Smt.  Chandrawati  Sharma  has  also  stated 
before  the  Commission  that  she  had  two  meetings 
with  the  Chief  Minister  at  which  she  handed  over 
representations  made  by  her.  She  was,  however, 
told  by  the  Chief  Minister  that  there  was  nothing 
against  her  in  the  state  and  that  he  had  acted  only. on 
the  directions  received  from  Delhi  and  that  if  she 
desired  to  obtain  any  redress  she  must  approach 
the  authorities  in  Delhi. 

7.264  As  observed  earlier,  the  name  of  Smt, 
Chandrawati  Sharma  did  not  appear  in  tlte  list  of 
activists  of  the  Anand  Marg  sent  by  the  Ministry '  of 
Home  Affairs  to  the  State  Government  nor  had  the 
State  Government  any  record  with  regard  to  her 
activities  as  an  Anand  Margi.  Smt.  Chandrawati 
Sharma  was  an  employee  in  the  Education  Depart- 
ment of  the  Government  of  Rajasthan  and  was  ac- 
cordingly a  public  servant.  She  was  entitled  to  the 
protection  of  Article  311  of  the  Constitution  '  of 
India.  She  could  not  be  dismissed  or  removed  from 
service  except  after  an  enquiry  in  which  she  had  heen 
informed  of  the  charges  against  her  and  given  reason- 
able opportunity  of  being  heard  in  respect  of  those 
charges.  It  is  true  that  enquiry  may  be  dispensed  with 
in  certain  exceptional  classes  of  cases  falling  within 
fa),  (b)  and  (c)  of  the  proviso  to  Article  311  (2)  of 
the  Constitution  but  no  action  to  dispense  with  an 
enquiry  appears  to  have  been  taken.  This  discloses 
a  clear -case  of  abuse  of  authority  and  misuse  of  pow- 
er contrary  to  the  provisions  of  the  constitution.  Smt. 
Chandrawati  Sharma  was  entitled  to  the  Constitutional 
protection  but  in  defiance  of  the  provision  her  services 
were  terminated  without  holding  any  inquiry  and  with- 
out dispensing  with  the. holding  of  an  enquiry  as  per- 
mitted by  the  Constitutional  provisions.  The  termination 
of  employment  of  Smt.  Chandrawati  Sharma  was  ex- 
facie.  unauthorised  and  carried  out  onlv  on  account  Af 
the  directions  received  by  the  Chief  Minister  from  Shri 
R.  K.  Dhawan. 

7.265  As  observed  earlier,  an  inquiry  was  held 
against  Shri  R.  N,  Gaur  and  he  was  exonerated  of  any 
remissness   in   the  performance   of  his  duties     The 


89 


intimation  was.  received,  from  Shri  Dhawan  by  the 
Chief  Minister  for  suspending  Shri  Gaur  immediately. 
This  intimation  was  later  countermanded  by 
Shri  Dhawan  "when  Shri  Joshi  rang  back  Shri  Dhawan 
according  to  the. story  of.  Shri  Harideo  Joshi,  and  it 
was  suggested  that  instead  of  suspending  Shri  Gaur 
immediately  an  inquiry  should  be  made  into  the 
.conduct  Of  Shri  Gaur,  and  pursuant  to  this  intimation 
Shri  Harideo  Joshi  ..recorded  in  his  note,  which  has 
been  set  out  earlier,  that  .  an  enquiry  should  be 
conducted  immediately, 


.7.266  Shri  Mangal-  Behari  is  a  member  of  the 
Indian  Administrative .-  Service.  He  was  formerly 
Chairman  of  the  Rajas  than  State  Electricity  Board. 
He  was  transferred  from  that  office  on  the  30th  of 
June,  1975  to  the  office  of  the  Revenue  Board 
at  Ajmer  and  on  August  20,  1975  he  was  directed  by 
.the  Chief  Minister,  to  go  on  leave.  Shri  Mangal 
Behari  made  several  representations,  both  to  the 
Chief  Minister  and  also  to  the  Ministry  of  Home 
Affairs  and  to  the  Prime  Minister's  Secretariat  but  to 
no  avail.  Ultimately,  he  was  feposted  on  December 
15,  1976-  The  file  in  which  the  recommendation 
was  made  that  he  should  be  reposted  remained  in  the 
Prime  Minister's  Secretariat  for  a  period  of  ten  months 
between  the  3rd  of  February,  1976  to  8th  of 
December,  1976;  and  even  when  an  order  was  made 
for  reposting  him,  Smt.  Gandhi  made  a  note  on 
December  8,  1976  to  the. following  effect: — 


"Yes.    But  an  eye  should  be  kept  on  him  from 
tune  to  timt. 

"  Sd  :  Indira  Garidhi".. 


Accordingly ]  the  formal  decision  was  communicated 
to  the  State  "Government  on  December  15,  1976  and 
.'  Shri  Mangal  Behari  was'  allowed  to  resume  duty. 

"  7.267  According  to  Shri  Mangal  Behari,  he  was 
till  1971  a  member,  of  the  Anand.  Marg,  but  solely 
concerned  with  the  spiritual  side  of  that  organisation. 
He  further  stated  that  he  had  severed  all  connections 
"vrith  that  institution,  /thereafter,  but  he  had  been 
victimised  because  he  had  declined  to  make  available 
the  trucks  of  the  Electricity. Board  free  of  charge  for 
carrying  workmen  of  the  Electricity  Board  to  Delhi 
to  participate  in  a  rally,  to  be  held  on  June  20,  1975 
&t.  the  Boat  Club  to/ express,  solidarity  and  support 
fo  the  then  Prime  Minister,  Smt,  Indira  Gandhi  in 
the'  wake  of  the  Allahabad  High  Court  Judgment. 


.  7.268  According  to  the  evidence  of  Shri  Rajendra 
Jsiir  the"  then 'Secretary,  RSEB  on  or  about'  June  17, 
1975  he  was  called  by  the  then  Transport  Minister, 
Shri  Mohan  Chhangafti  at  his  residence,  who  asked  him 
to  arrange  for  sending  5,000  persons  from  the  State 
Electricity  Board  to  the  rally  being  organised  in  Delhi 
m  support  of  the  then  Prime  Minister  Smt.  Indira 
Gandhi,  and  that  the  persons  who  had  to  go  to  Delhi 
to  participate  in  the  rally  were  to  be  arranged  by  the 
Electricity  Board  and .  arrangement  for  their  transport 
to  Delhi  arid  back  had  to  be  made  by  the  Electricity 
Board.    Shri  Rajendra   Jain  informed   the  Minister 


that  it  was  impossible  on  the  part  of  the  officers  of 
the  Electricity  Board  to  ask  the  persons  working  in 
the  Electricity  Board  to  go  to  Delhi  and  also  informed 
that  it  was  difficult  for  the  Electricity  Board  to  supply 
its  own  trucks  for  carrying  these  persons  to  Delhi. 
He  was  informed  that  a  decision  had  been  taken  at 
the  highest  level  and  that  the  Chief  Minister  was  in 
Delhi  and  he  had  deputed  the  Transport  Minister  to 
organise  the  rally  in  Rajasthan  and  that  he  was  making 
these  arrangements  at  the  behest  of  the  Chief  Minister. 
Shri  Rajendra  Jain  has  further  'stated  that  his 
Chairman,  Shri  Mangal  Behari  had  told  him  that  he 
"also  was  being  pressurised  to  arrange  the  conveyance 
to  Delhi  and  back  of  at  least  those  persons,  who  were 
working  in  the  State  Electricity  Board. 

7.269.  Shri  Mangal  Behari  has  said  in  his  deposition 
that .  he  had  gone  and  met  the  Chief  Secretary  and 
told,  him  :  "How  can  this  order  be  complied  with?" 
As  advised  by  the  Chief  Secretary,  when  he  later  met 
the  Chief  .  Minister,  the  CM.  was  "very  brief 
and  very  curt"  and  said  that  "You  do  not  recognise 
Chairman,  Shri  Mangal  Behari  had  told  him  that  he 
CM.. to  meet  the  Power  Minister. 

7.270  Ultimately  it  was  arranged  that  a  request 
Should  be  made  by  the  General  Secretary  of  the  Trade 
Union  that  trucks  of  Rajasthan  State  Electricity  Board 
be  made  available  for  enabling  the  workmen  to  attend 
the  General  Body  meeting  of  the  Workers'  Federation 
at  New  Delhi  as  also  to  participate  in  the  rally  at  the 
Doat  Club  on  June  20,  1975  in  support  of  Smt.  Indira 
Garidhi.  Accordingly,  a  request  was  received  in 
writing  and  was  passed  on  to  the  Chief  Engineer  with 
the  instructions  by  the  Chairman  on  the  basis  of  which 
he  issued  an  order  placing  certain  number  of  trucks 
at  the  disposal  of  the  Union  on  certain  conditions. 
This  is  supported  by  the  evidence  of  Shri  Damodar 
Maurya,  who  stated  that  on  June  16,  1975, 
Shri  Harideo  Joshi,  Chief  Minister,  Rajasthan  had 
invited  him  to  a  meeting  of  number  of  persons 
including  himself  at  Delhi  and  had  informed  that  a 
grand  national  rally  was  going  to  be  organised  on 
June  20,  1975,  in  which  the  State  of  Rajasthan  should 
send  near  about  1  lakh  persons  and  that  Shri  Harideo 
Joshi  had  assured  that  every  transport  arrangement 
shall  be  made  through  the  Government  The 
arrangement  for  carrying  the  employees  .of  the 
Rajasthan  Electricity  Board  was  to  be  made  by  the 
Electricity  Board  and  the  employees  were  to  join  the 
rally— the  workmen- being  given  the  special  paid  leave. 

7.271  Before  sending  the  employees  to  the  Tally 
at  Delhi,  a  meeting  was  held  at  the  residence  of 
Shri  Mohan  Chhangani,  Transport  Minister,  according 
to  Shri  Maurya,.  on  June  18,  1975,  in  which  the 
Chief  Secretary  of  the  Government  of  Rajasthan, 
along  with  Shri  Rajendra  Jain,  Secretary  of  the 
Rajasthan  State  Electricity  Board  were  present.  The 
Transport  Minister  said  at  that  meeting  that  the  trucks 
would  be  arranged  by  the  Rajasthan  State  Electricity 
Board  requesting  for  supply  of  trucks  for  carrying 
workers  to  Delhi  to  attend  the  General  Body  meeting 
of  the  Federation  and  to  participate  in  the  Boat  Club 
rally  at  Delhi  on  June  20,  1975,. .  On  -receipt  of  an 
intimation  from  the  Rajasthan  State  Electricity  Board 
regarding  allotment  of  58  trucks  on  payment  basis 


and.  subject  to  certain  conditions  lie  approached  the 
then  Transport  Minister  .and  refused  to  comply  with 
any  of  the  terms  set  out  by  the  Board,  as  this  was 
against  the  assurance  given  by  the  Chief  Minister  at 
DelhL  Shri  Mohan  Chhangani  the  then  Transport 
Minister  told  him  that  the  Board's  letter  was  only  a 
formality  and  that  no  charge  will  be  made  from  the 
Federation  or  from  the  "workers  who  go  to  attend  the 
rally  at  Delhi.  Shri  Mauryja  has  stated  before  the 
Commission  that  it  was  not  possible  to  call  a  general 
body  meeting  at  such:  a  short  notice  nor  was  it  in 
fact  called  as  he  was  told  by  Shri  Mohan  Chhangani, 
Transport  .Minister,  that  a  mention  of  this  was 
required  only  for  the  purpose  of  getting  the  special 
;paid  leave  and  the  tracks  for  the  workers.  Accordingly, 
no  place  for  holding  the  general  body  meeting  was 
selected  in  Delhi  nor  invitations  were  sent  for  the 
same.  According  to  the  statement  of  Shri  Maury  a, 
Workers  numbering  about  5,000  who  were  taken  in 
the  trucks  of  the  Electricity  Board  took  part  in  the 
rally  oh  June  20,  1975 '  at  Delhi.  Those  workers 
Who  had  taken  part  in  national  rally  at  Delhi  were 
given  three  days'  special  casual  leav&  with  pay.  As 
per  evidence  before  the  Commission  it  is  seen  that 
no  route  permits  were  obtained  from  the  Rajasthan 
Transport  Authority  as  required  under  the  Motor 
Vehicles  Act  for  taking  the  trucks  out  of  the  limits  of 
the  Rajasthan  State  and  for  the  journey  to  Delhi. 

.7.272  Bills  in  respect  of  the  use  of  Electricity 
'.  Board  trucks  by  the  workers'  union  were  sent  by  the 
Board  to  Shri  Maurya  who  stated  by  his  letter  dated 
April  20,  1977  that  the  charges  of  trucks  issued  by 
the  Management  for  workmen  to  join  the  rally 
organised  on  June  20,  1975  were  ndt  payable  by  the 
Trade  Union  because  the  arrangement  was  made  by 
•the  management  and  the  bills  should,  therefore,  be 
charged  from  the  Rajasthan  State  Government. 

7.273  Shri.  Mangal  Behari  has,  it  is  true,  stated 
that  he  was  associated  with  the  Anand  Marg  some- 
time before  the  year  1971,  but  he  had  severed  his 
connection  with  that  organisation.    He  further-stated 

.that  on  19th  of  June,  1975,  he  had  passed  ah  order 
that  the  trucks  should  be  made  available  on  payment 
of  the  appropriate  charges  and  after  obtaining  the 

Requisite  permits,  and  since  he  did  not  follow  the 
suggestion  made  by  the  Chief  Minister,  he  was 
victimised  by  being  first  transferred  from  his  office  as 
the  Chairman,  which  was  a  very  prestigious  office  to 
a  comparatively  unimportant  office  and  thereafter  "he 
was  asked  to  go  on  leave  and  for  a  major  part  of 
that  period  he  received  no  remuneration  at  all. 
This,  according  to  Shri  Mangal  Behari,  was  intended 
to  be  a  penalty  measure  taken  against  him  because 
he  stood  up  against  the  unauthorised  demand  for 
utilising  the  State  trucks  in  support  of  a  party 
activity  of  the  Congress  Government,  to  which  party 

.the  Chief  Minister  belonged. 

7.274  The  evidence  establishes  that  there  was 
abuse  of  authority  in  directing  the  termination  of 
employment  of  Smt,  Chandrawati  Sharma ;  in 
transferring  Shri  .Mangal  Behari  from  the  Chairman- 
ship of  the  Rajasthan  State  Electricity  Board  and  later 
compelling  him  to  proceed  on  leave,  and  also  m 
directing  the  inquiry  against  Shri-R.  N.  Gaur. 


7.275  According  to  the  evidence  ,of  Shri  Harideo 
Joshi,  the  original  intimation,  received  from 
Shri  Dhawan  contained  a  direction  that  Shri  Gaur 
should  be  suspended  and  that  Shri  Mangal ;  Behari 
should  be  relieved  from  service.  According  to 
Shri  Harideo  Joshi,  he  after  consulting  his  officers 
rang  up  Shri  Dhawan  again  and  Shri  Dhawan  agreed 
to  only  an  inquiry  being  held  against  Shri  R.  N.  Gaur. 
Even  though  there  was  a  direction  to  relieve 
Shri  Mangal  Behari  of  his  office,  no  such  action  could 
immediately  be  taken  by  the  State  Government 
according  to  law  because  Shri  Mangal  Behari  was  an 
IAS  officer  posted  to  Rajasthan  cadre  and  his 
compulsory  retirement  could  only  be  ordered  by  the 
Central  Government  in  consultation  with  the  State 
Government. 

7.276  The  circumstance  that  action,  as  initially 
directed  by  Shri  Dhawan  was  not  taken  according  to 
the  strict  tenor  and  there  was  some  modification  made 
in  regard  to  Shri  R.  N.  Gaur  and  Shri  Mangal  Behari, 
does  not,  in  the  view  of  the  Commission,  amount  to  ■ 
any  substantial  change.  It  is  still,  an  abuse  of 
authority,  when  pursuant  to  the  directions  given  by 
Shri  Dhawan,  Shri  Harideo  Joshi  has  purported  to 
hold  an  inquiry  against  Shri  R,  N,  Gaur  and  has 
directed  Shri  Mangal  Behari  to  proceed  on  leave;  and 
kept  him  continuously  on  leave  right  till  15th  of 
December,  1976. 

7.277  Shri  Harideo  Joshi  is  the  person,  who  gave 
the  ■  instructions.  He  has  stated  before  the 
Commission  that  when  he  handed  over  the  note  of 
the  instructions  received  from  Shri  Dhawan  and  as 
recorded  by  him  to  his  Chief  Secretary,  he  expected 
that  action  would  be  taken  according  to  law.  He 
did  not  intend  that  action  was  not  to  be  taken  according 
to  law.  But  the  manner  in  which  the  action  was 
taken,  the  expedition  with  which  the  orders  were 
carried  out  in  respect  of  Shri  S.  N,  Sharma, 
Smt,  Chandrawati,  Shri  R.  N.  Gaur  and  Shri  Mangal 
Behari  clearly  indicate  that  no  option  was  left  to  the 
Chief  Secretary,  but  to  carry  out  the  orders, .  as 
directed.  It  does  not  appear  to  be  the  understanding 
of  the  Chief  Secretary  or  of  the  subordinate  officials 
that  they  were  to  regulate  the  directions  of  the  Chief 
Minister  according  to  law  and  take  such  action  as 
was  permissible  and  after  satisfying  themselves 
whether,  in  law,  such  action  should  be  taken.  In 
any  event,  the  action  against  Smt.  Chandrawati 
Sharma  was  wholly  unjustified.  There  was  no  scope 
for  action  being  taken  against  her  by  relieving  her  of 
her  office  as  a  teacher  in  the  Maharaja's  Girls  School 
without  giving  her  an  opportunity, .  as  provided  by 
Article  311  of  the  Constitution.  There  was  no  order 
from  the  Governor  dispensing  with  an  inquiry  oa 
any  of  the  grounds  provided  in  the  proviso  to  Article 

... 7.278.  In  these  circumstances,  it  is  established  that 
Shri  Harideo  Joshi  directed  his  subordinate  officials 
to  carry,  out  the  directions  recorded  by  him  as 
received  from  Shri  phawap, ", 

7.279  Shri  Harideo  Joshi  was  served  with  notice 
under  Rule  5(2)  (a)  of  the    Commissions  of  Inquiry 


91 


Rules  and  summons  under  section  8B  of  the  Commis- 
sions of  Inquiry  Act.  The  Commission  has  taken  into 
account  his  statement  as  also  the  evidence  led  by  him. 

7.280  Shri  Harideo  Joshi  has  taken  two  different 
stands.  When  it  came  to  Shri  Dhawan  he  took  the 
line  that  he  acted  as  he  was  told  to  do  by  Shri  Dhawan 
which  he  thought  were  in  fact  the  orders  of  the  Prime 
Minister.  In  the  case  of  Shri  Gaur  he  had  sought 
and  obtained  clearance  from  Shri  Dhawan  for  not 
suspending  Shri  Gaur.  As  for  Shri  Mangal  Behari, 
he  had  asked  him  to  proceed  on  leave  even  for  which 
his  Chief  Secretary  had  obtained  the  clearance  of 
Joint  Secretary,  Shri  P.  N.  Bahl  in  the  Prime  Minis- 
ter's Secretariat.  Regarding  the  action  taken  on  the 
others,  namely  Shri  and  Smt.  Sharma,  Shri  Joshi  had 
taken  the  plea  that  when  he  marked  the  papers  to  the 
Chief  Secretary  "for  necessary  action",  he  .intended 
that  action  would  be  taken  by  the  officers  according 
to  law.  Tiie  Commission  feels  that  actually  action 
was  taken  by  the  officers  as  desired  by  the  Chief 
Minister  and  not  according  to  law,  Shri  Joshi  him- 
self has  mentioned  in  his  statement  before  the  Com- 
mission that  he  felt  that  he  was  left  with  no  option 
but  to  carry  out  the  directions  as  conveyed  to  him 
by,  Shri  R,  K.  Dhawan.  He  cannot  escape  the 
responsibility  for  what  followed  both  with  regard  tt> 
Smt.  S.  N.  Sharma's  termination  of  services  arid 
the  long  period  that  Shri  Mangal  Behari  had  to  remain 
on  leave.  During  his  statement  before  the  Commis- 
sion, Shri  Harideo  Joshi  has  himself  conceded  that 
a  mistake  was  committed  in  the  case  of  Smt.  Sharma. 
Shri  Joshi  has  thus  misused  his  position,  subverted 
the  established  administrative  procedures  and  abused 
his  authority  in  terminating  the  service  of  Smt.  Sharma 
without  observing  the  Constitutional  provisions. 

7.281  The  next  question  relates  to  the  involvement 
of  Shri  Dhawan  and  Smt.  Indira  Gandhi.  According 
to  Shri  Dhawan,  he  merely  read  out  the  CBI  report, 
which  had  been  received  by  him  from  the  Prime 
Minister  and  he  gave  no  directions  to  Shri  Harideo 
Joshi  on  telephone.  He  also  denied  that  Shri  Harideo 
Joishi  again  rang  him  up  after  a  few  minutes  after 
the  first  telephonic  conversation. 

7.282  Considering  the  evidence,  the  testimony  of 
Shri  Harideo  Joshi  on  this  aspect  is  more  reliable. 
As  according  to  him  he  had  initially  recorded  in  Hindi 
the  gist  of  the  order  received  by  him  from  Shri  Dhawan, 
which  was  later  recorded  in  English  after  discussion 
with  his  officer.  Shri  .Dhawan-  has  admitted  that  he 
had-carried  out  the  directions  of  Smt.  Indira  Gandhi. 
According  to  him,  he  was  handed  over  the;  CBI  report 
which  was  read  over  to  Shri  Harideo  Joshi  by  him  on 
the  telephone. 

7.283  It  appears  that  some  notipgs  in  the  file  of 
Department  of  Personnel,  Government  of  India,  had 
been  initiated  early  in  the  month  of  February.  1975 
with  regard  to  the  involvement  of  Sjiri  Mangal  Behari 
in  the,  activities  of  Anand  Marg.1  A  list  of  Anand 
Margis  had  also  been  prepared  by  the  Central  Govern- 
ment and  the  names  of  Shri  S,  N.  Sharma  and  Shri 
Mangal  Behari  were  included  in  the  list.  If  an  inti- 
mation was  received  by  the  Prime  Minister  with  regard 
to  the  CBI  inquiry,  nothing  would  have  been  easier 


than. to  send  a  report  in  writing  with  regard  to  the 
intimation  so  received  to  the  concerned  Ministry  in 
the  Government  of  India  and  to  the  Chief  Minister  of 
Rajasthan.  The  steps  taken  of  reading  over  to  the 
Chief  Minister,  the  entire  report  of  the  CBI  on  tele- 
phone containing  a  number  of  details  would  be  unusual. 
Jt  appears  that  no  record  was  intended  to  be  kept  of 
the  conversation  between  Shri  Dhawan  and  the  Chief 
Minister  of  Rajasthan  and  that  is  why  Shri  Dhawan 
rang  up  and  informed  Shri  Harideo  Joshi  about  the 
action  to  be  taken  by  the  letter  against  the  four  per- 
sons named  in  that  report.  It  is  purely  a  twist  of 
circumstances  that  Shri  Harideo  Joshi  recorded  in  the 
first  instance,  having  regard  to  the  multiplicity  of  details 
in  the  action  intended  to  be  taken,  in  Hindi  of  the 
intimation  given  to  him  and  thereafter  made  a  formal 
record  of  it  in  English  after  consultation  with  his  offi- 
cials. It  is  true  that  the  Hindi  version  Of  the  intimation 
was  not  maintained  but  there  is  no  reason  to  disbelieve 
the  testimony  of  Shri  Harideo  Joshi  in  that  behalf, 
especially  when  the  English  version  substantially  con- 
tains the  recommendations,  which  are  made  by  the 
CBI  in  regard  to  the  action  to  be  taken  against  the 
four  persons  concerned  and  Shri  Dhawan  says-  that 
intimation  was  given  on  the  telephone  with  regard  to 
that  report. 

7.284  The  involvement  of  Smt.  Gandhi  with  regard 
to  the  action  taken  against  Shri  and  Smt.  S.  N.  Sharma, 
Shri  R.  N.  Gaur  and  Shri  Mangal  Behari  is  clearly 
established  by  the  testimony  of  Shri  Dhawan  as  corro- 
borated by  the  testimony  of  Shri  Harideo  Joshi  and 
the  various  actions,  which  were  taken  with  very  great 
despatch  on  20th  of  August,  1975  or  soon  thereafter. 

7.285  When  a  formal  notice  was  issued  tinder  rule 
5(2)  (a)  of  the  Commissions  of  Inquiry  Rules  in  re- 
gard to  this  matter,  Smt.  Indira  Gandhi  declined  to  file 
a  statement,  as  required  by  the  Rules.  When  the 
Commission  asked  her  to  enter  the  witness  box  and 
be  examined  under  section  5(2)  and  a  procedure 
analogous  to  Order  X  of  the  Civil  Procedure  Code, 
she  declined  to  take  the  oath  and  refused  to  answer 
any  question  on  the  plea  that  she  was  hot  legally  and 
Constitutionally  bound  to  answer  the  questions.  In 
the  circumstances,  it  is  open  to  the  Commission  to  draw 
adverse  inference  against  her. 

7.286  The  .circumsiances#^jerneh  established  top 
imTnhfgmmt,  ars,  briefly  these  ■:— 

(i)    that  she  received  information  that  Shri  S.  N. 

Sharma  was  an  Anand  Margi  and  that  Anand 

?        Marg  was  declared  banned  organisation;    . 

(ii)  that  even  though  Shri  R.  N.  Gaur  was  in- 
formed about  the  burning  of  some  records, 
he  did  not  reach  in  time,  nor  tried  to  save 
the  records; 

(iii)  that  Smt.  Chandravati  Sharma  was  also  an 
Anand  Margi  and  she  was  stilt  continuing  in 
employment  as  a  public  servant; 

(iv)  that  Shri  Mangal  Behari,  an  IAS  officer  was 
an  active  Anand  Margi;  and 


92 


(v)  the  file  of  Shri  Mangal  JMiari  remained.  perid: 

--  ing:  with  the  .then:  Prime  Minister's  Secretariat 

.  from  February   3,    1976.  to  December  .8, 

1976..   'There  is. no  satisfactory  explanation 

.  forthcoming  for  this  inordinate  delay. 

. .  '-  ,  ■  i  ... 

7.287  In  the  absence  of  any  explanation  forthcera- 
ing  from  Smt.  Indira  Gandhi  and  ou  the  evidence 
produced,  the  Commission  is  satisfied  that  she  .was 
responsible,  for  (i)  causing  the  termination  of  services 
of  Smt.  Chandrawati  Sharma,  Assistant  Teacher, 
Government  of  Rajasthan,  in  violation  of  the  Consti- 
tutional provisions;  and  (U)  the  prolonged  .forced  leave 
on  which 'Shri  Mangal  Behari  had  to  remain:  for  about 
16  months  and  for  causing  the  attending  -hardships 
which  ensued  as  a  result  thereof .  She  has  ^thus:  mis- 
used her  position,  abused  her  authority  and  subverted 
well-established  administrative  procedures  and  lawful 
processes.    ■ 

7.288  Shri  Dhawan  was  served  with  a  notice  under 
rule  5(2)  (a)  of  the  Rules  and  a  summons  under 
section  8B  of  the  Act,  He  responded  to  the  summons. 
Shri  Dhawan  has  taken  the  line  that  he  merely  read 
but  the  CBI  report  as  directetTby  flic  Prime  Minister, 
but  did  not  indicate  any  specific  action  to  be  taken 
with  regard  to  any  of  the  individuals  figuring  in  the 
note  recorded  by  Shri  Harideo  Joshi.  According  to 
him  this  should  be  apparent  from  the  fact  that  Shri 
Gaur  was  not  suspended  and  Shri  Mangal  Behari  was 
also  not  relieved  from  service  but  only  sent  on  leave. 
If  what  he  had  conveyed  to  Shri  Joshi  were  to  be 
treated  as  orders,  there  was  no  reason  why  the  opera- 
tional aspects  of  these  orders  should  have  been  inter- 
fered with,  as  in  fact  it  was  done  in  the  two  cases 
referred  to  above.  This  plea  of  DhaWan  is  not  tenable 
inasmuch  as  for  (he  deviation  in  both  the  cases, 
Shri  Joshi  and  the  Chief  Secretary  had  obtained  the 
clearance  from  Dhawan  in  one  case  and  Shri  P.  N, 
Buhl,  Joint  Secretary  in  the  PM's  Secretariat  in  the 
other  case  for  the  eventual  course  adopted.  Shri 
Dhawan  did  read  out  from  the  CBI  note  at  the  ins- 
tance of  the  Prime  Minister.  The  Commission  feels 
that  as  in  many  other  cases,  Dhawan  has  been  acting 
merely  on  orders  and  on  that  account  it  does  not  hold 
him  responsible  for  the  subsequent  things  that  followed. 


7.289  The  Commission  feels  concerned  about  two 
important  aspects  figuring  in  this  case. 


.7.290  The  first  is  the  manner  in  which  the  services 
pf  Smt.  Chandrawati  Sharma,  who  was  only  an  Assis- 
tant Teacher,  were,  terminated  without  the  slightest 
fuss  or  protest  and  she  remained  removed  from  service 
till  she  was  reinstated  after  the  change  of  Government 
following  the  Lok  Sabha  and  the  Assembly  Elections 
.  in  March  1977.  No  functionary  oflhe  Government 
put  up  even  as  much  as  a  note  pointing  out  that  the 
political  activities  alleged  against  her  were  not  correct 
-arid  that  she  was  being  kept  out  of  service  for  no  valid 
and  understandable  reason.  As  against  this,  totally  in- 
different and  callous  attitude,  the  "manner  in  which  the 
State  Government  officials  rallied  to  the  support  of 
Shri  Mangal  Behari,  an  IAS  officer,  is  indeed  unique 
and  is  in  striking  contrast  to  the  manner  in' which  Smt. 


Sharma  was  dealt,  with.  How  are  we  .going,  to  ensure 
that  every  employee  of  the  Government  regardless  ol 
their  rank  and  status  enjoys  full  security  and. protec- 
tion of  service?  Until  this  is  done,  the  manner  in 
jwhich  these  two  functionaries  of  the  Government  were 
dealt  with— one  a  low-placed  Assistant  Teacher,  and 
the  other  .  a  high-placed-  IAS  officer— would .  be 
considered  as  ■;  ..an  unpardonable  and  invidious 
distinction. 

■7.291  The  .second  is  with  regard,  to  the  file  that 
was  maintained  by  the  Intelligence  Bureau  against 
Shri  Mangal  Behari.  The  Commission  had  access  to 
the  Home  Ministry  file  dealing  with  Shri  Mangal 
Behari's  activities  with  regard  to  Anand  Marg.  It  is 
surprising  how  the  various  specific  activities  alleged 
against  Shri  Mangal  Behari  by  the  Intelligence  Bureau 
were  systematically  demolished  by.  the  Rajasthan  State 
CJ.D.  It  is  the  exonerating  and  alleviating  reports 
of  the  State  C.I.D,  which  enabled  eventually  the  Gov- 
ernment to  take  a  lenient  view  of  Mangal  Behari. and 
to  allow  him  to  continue  in' service...  lu  the  lace  of 
the  consistent  reports  in  favour;  of  ^Shri  Mangal  Behari 
by -the  Rajasthan  State  C.I.D.,  even  the  Intelligence 
Bureau  eventually,  veered  round  to  the  point  of.  view 
.'which  is  evident 'from  the  report  of  the  Director,  Intel- 
ligence Bureau  himself  which  runs  as  follows  :— 

"The  activities  of .  Shri  Mangal  Behari,  as  are 
known  to  us,  remained,  confined  to  the  spiri- 
tual and  organisational  fields  of  the  Anand 
Marg.  It  is  quite  likely  that  Shri  Behari  was 
taken  in  by;  the  spiritual  pretentions  of  the 
Anand ' '  Marg  without  realising  its  true 
characters'." 

7. 292. If  one  had  to  go  Only  by  the  initial  Intelli- 
gence Bureau  reports;  it  would  have  been  difficult  for 
Mangal  Behari  to  have  continued  in  service,  as  all 
the  reports1  of  the  Intelligence  Bureau,  were  extremely 
damaging  to  Shri  Mangal  Behari.  It  was  fortunate 
for.  him  that  the  reports  of  his  State  C.I.D.  were  more 
factual  than  those,  of' reports- of  the  IB. 

7.293  la  this  case,  if  the  Department  of  Personnel 
of  the  Government  Of  India  did  not  have  the  benefit 
of -the  scrutiny  of  the  IB  reports  by  the  reports  obtain- 
ed from  the  Rajasthan  State  Cl-D.,  it  is  quite  likely 
that  the  Department  going  by.  the  IB  report  alone 
cculd  have  come  to  certain  conclusions  which  may  not 
have  been' altogether  helpful  to  Shri  Mangal. Behari. 
May  be,  this  is  one  of  the  few  cases  where  the  IB 
report  may  not  have  been  in  complete  conformity  with 
all  the  facts.  In  this  connection,  the  Commission 
would  invite  the.  attention  of  the  Government  to  the 
report  initiated  by  the  IB  on  Justice  R.  N.  Aggarwal 
and  which  came  to.be  used  by -the  Government  to  the 
detriment  of  Justice  Aggarwal.  As  it  transpired,  the 
IB  report  on  Justice  R.  N.  Aggarwal  was  also  not 
correct  in  certain  material  particulars;  Considering, 
therefore,,  the  risks,  involved  and  the  damage  that  an 
adverse  IB  report  can  cause  to  an  individual,  both 
in  terms  of  his  reputation  as,  also  of  his  career  pros- 
pects, the  Commission'  recommends  that  the  Govern- 
ment should  take  steps  to  ensure  that  every  IB  report 


93 


on' the  activities  and  material' particulars  of  individual 
is  correct.  1 

19.  Irregularities  in  initiating  action  resulting  in 
search  and  seizure  operations  under  the  Income 
tax  Act. in  the  case  of  two  trade  union  leaders. 

.7.294  Sometime  early  in  August  .  1975,  Shri 
Harihar  Lai  met  Shri  D.  Sen  in  the  letter's  office  on 
Shri  Sen's  request.  It  would  appear'  that  Shri  Sen 
passed  on  to  Shri  Harihar  Lai  certain  information 
relating  to  one  Shri  Prabhat  Kar  who  was  at  the 
relevant  time  the  General  Secretary  of  the  All  India 
Bank  Employees  Association  and  Shri  D.  P.  Chadha 
who  was  the  President  of'  the  same  Association. 
Information  in  relation  to  Shri  Prabhat  Kar  was  that — 

(1)  he  received  a  remuneration  of  Rs.  2,000 
p.m.  ; 

(2)  he  stayed  'in  a  house  rent  of  which  was 
borne  by  the  Association  ; 

(3)  the  Association  provided  him  with  a  motor 
vehicle ; 

(4)  in  1973  he  received  gifts  totalling,  up  to 
Rs.  one  lakh  at  the  time  of  his  daughter's 
marriage  ;  and  that  part  of  the  amount  had 
been  invested  and  deposited  in  Bank 
account ; 

(5)  he  was  receiving  various  other  pecuniary 
benefits  and  had  amassed  wealth  much  be- 
yond his  known  sources  of  income ;  and 

(6)  lastly,  he  had  a  standard  of  livinjr  much 
above  that  warranted  by  his  known  sources 
of  income. 

7.295  In  the  case  of  Shri  D.  P.  Chadha,  the  in- 
formation was  that — 

(1)  he  was  drawing  a  salary  over  Rs.  2,000 
p.m.; 

(2)  he  had  purchased  a  flat  in  Punjab  National 
Bank  Housing  Society  near  Lallubhai  Park 
at  Andheri  in  Bombay ;  and  that 

(3)  he  may  not  be  an  income  tax  assessee. 

7.296  In  the  case  of  Shri  Prabhat  Kar,  Shri  Harihar 
Lai  made  certain  enquiries  and  found  out  that 
he  was  not  being  assessed  to  income  tax  and  that  it 
was  ntot  known  in  which  Commissioner's  jurisdiction 
he  was  assessable.  Shri  Harihar  Lai,  therefore,  autho- 
rised search  operations  in  the  case  ,of  Shri  Prabhat 
Kar  u/s  132  of  the  Income  Tax  Act.  In  the  case 
of  Shri  D.  P.  Chadha,  Shri  Harihar  Lai  passed  on 
the  information  received  by  him  to  Shri  O.  V. 
Kuruvilla,  the  then  Commissioner  of  Income  Tax, 
Bombay  City-1.  On  the  basis  of  the  information 
referred  to  above  in  this  case,  Shri  G.  V.  Kuruvilla 
authorised  search  operations  u/s  132  of  the  Income 
Tax  Act  in  the  case  of  Shri  D.  P.  Chadha  at  Bombay. 


•7.297 -Search  operations  in  both  these  cases- were 
carried  out  on"  the  13th  August,-  1975.  -While  Shri 
Prabhat  Kar  had  not  been  filing  returns  of  income  in 
regard  to  the  remuneration  received  by  him  from  the 
Alt' India  Bank  Employees  Association,  it  was  seen 
that  Shri  D.  P.  Chadha  was  filing  returns  of  income 
regularly  and  that  all  his  assets  were  properly 
explained. 

7.298  In  the  course  of  his  testimony  before  the 
Commission,  Shri  D.  Sen,  the  then  Director  of  the 
C.B.I.,  stated  that  certain  information  in  regard  to. 
S/Shri  Prabhat  Kar  and  D.  P.  Chadha,  which  he  had 
recorded  in  a  note  dated  21-7-75,  was  furnished  to 
him  by  Shri  R.  K.  Dhawan,  who  had  gone  to  Shri 
D.  Sen's  office,  Shri  Sen  added  that  he  had  passed 
on  the  information  to  the  Ofncer-in-Charge  of  the 
Intelligence  Unit  for  verification  and  that  as  recom- 
mended by  his  Joint  Director,  he  had  passed  on  the 
information  collected  to  Shri  Harihar  Lai. 

7.299  In  his  written  statement  in  response  to  the 
notice  under  Rule  5(2)  (a)  of  the  Commissions  of 
Inquiry  (Central)  Rules,  1972,  Shri  Sen  has  stated 
that  the  information  that  S/Shri  Prabhat  Kar  and 
D.  P.  Chadha  were  office  bearers  in  various  Bank 
Unions  and  that  they  extorted  moaey  for  donations 
to  various  Union  funds  from  the  clients  of  the  Banks 
and  that  they  misused  Unio'n  funds  and  were  living 
in  good  style  was  received  by  him  oh  or  before 
21-7-1975  from  Shri  R.  K.  Dhawan  of  the  PM's 
Secretariat  and,  Shri  Om  Mehta  who  was  then  the 
Minister  of  State  in  the  Department  of  Personnel. 
He  has  added  that  at  that  stage  he  did  not  know 
whether  S/Shri  Prabhat  Kar  and  D.  P.  Chadha  were 
or  were  not  public  servants. 

7.300  S/Shri  R.  K.  Dhawan  and  D.  Sen  had  also 
appeared  in  response  to  summons  u/s  8B  of  the 
Commissions  of  Inquiry  Act,  1952.  They  had  also 
availed  of  the  opportunity  to  make  their  submissions 
on  the  evidence  adduced  before  the  Commission.  At 
both  these  stages,  Shri  R.  K.  Dhawan  denied  having 
given  any  such  information  to  Shri  D.  Sen.  In  res- 
ponse to  .a  query  from  Shri  D,  Sen,  Shri  Dhawan 
confirmed '  that  he  had  been  giving  information  of 
similar  "nature  to  Shri  D.  Sen  on  certain  other  occa- 
sions but  denied  that  he  had  given  any  information 
in  this  case. 

7.301  In  the  course  of  his  testimony  Shri  Harihar 
Lai  referred  to  the  information  as  supplied  by"  Shri 
D.  Sen  and  said  that  when  the  information  was  cop- 
ing from  a.  source  as  important  and  responsible  as 
the  Central  Bureau  of  Investigation,  he  believed  that 
there  was  case  for  authorising  search^operations  in 
the  case  of  Shri  Prabhat  Kar.  In  the  case  of  Shri 
D.  P.  Chadha,  he  had  merely  passed  on  the  informa- 
tion to  the  concerned  Commissioner  of  Income  Tax 
at  Bombay  for  necessary  action. 

7.302  After  completion  of  the  search  operations, 
Shri  D.  Sen  had  recorded  a  secret  note  dated  August 
16,  1975,    wherein   he,  stated    that,    he   had   given 


94 


information  as  indicated  in  the  nofe  to  Shri  Harihar  Lai 
about  S/Stiri  Prabhat  Kar  and  D.  P.  Chadha  and 
that  on  the  basis  of  that  information  the  houses  of 
S/Shri  Prabhat  Kar  and  D.  P.  Chadha  were  "got 
searched"  by  Shri  Harihar  Lai.  The  note  further 
adds —  "a  copy  of  his  (Shri  Harihar  Lai's)  report 
giving  result  of  these  searches  is  enclosed."  It  is  not 
clear  to  whom  Shri  Sen  had  addressed  this  note,  In 
his  oral  testimony  before  the  Commission,  Shri  D. 
Sen  has  stated  that  he  could  not  recollect  to- whom 


the  report  was  sent.  He,  however,  mentioned  that 
he  might  have  sent  it  to  Shri  Om  Mehta  or  to  Shri 
R.  K.  Dhawah. 

7.303  While  the  'circumstances  leading  up  to  the 
search  and  seizure  operations  in  these  two  cases  no 
doubt  appear  to  be  somewhat  unusual  especially  Shri 
D,  Sen's  role  therein,  no  subversion  of  administrative 
procedure  or  misuse  or  abuse  of  power  has  been 
clearly  established. 


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Ja§KE/)  HOW;  HE  COtiW  NOw(Mft^>Si-ARek  Tup.  '■*&«!£   oLAi^R*  WJ'fh 
;iR,  JAYAjPRA  KA<h  J4ARAY*f  S$  ><.  E  1  hE   «.A  tW  HA >*  *T  W     t :  f 
■•ALL^fcM.r  I'-'C ITET; THE ARmY  ANii JBOMC&'EN-.    0  ti^S-V  f.*r  Jft&i 
rtt^iAfcjjVAVRA^  P^Llfj!     HA     MR^JARAYAN    liAli  txPLAl^;    MS 

*S^t^<?H?  TiiA:ir^€  Hi£t>  v.cv  er.  ir  i^*-*^  army ^mp-^h1^^;^.  ■ 


-- im 


(MORE-SAMAChAR) 
St  K-fc  B-JG  ^6/J^T  t>r  VOX  .■•>■=■  uftbg  - 


t. 


#**> 


:ot  ho  ue-ttr 

Up  A  OU:SV»OM  ABPUT  HIS  efclHiu  A  PAKJV  Y«  tHE  Ai.CC  iratt  71**$. 
AuOPi  ED  W  T»fE  fcAUHAVI    SESSION  |N  NO¥Cf«*ER|KR*JAciJIVAW  Ow* 
m  it  thAi    h£  fiAD  SUPftRYEir  ONtY  THE  ECft^lC  RESOU)Vi*f$  Of* 
f.C  POLI I  IGAt;  RE&DOJilO^HE  «A£  NOT 6joT>5** KgjUtft  W?Sbw     *    ; 

fl^ff^^Afji'fe^  m4**a*  -saTd .r»  *»s  Prt»ci it al m )*M&*  smut* 

(f 0  A  O0C5J  ION  A ROU'l    Hi  5  RS R£t6*  M LiCYf  3*  nCTHOTED.VO, ■  flmffiftg. 

'.jfo^W:r.it  muLfi  be  he  sme. mutt:  as; av TOtatfK**, 

ArRATIO^AW  MUtY  OF  ttwtflSW?  WlYit  ALL  trtUNiB1E5*       j- 


„*,!.■■ 


M)t  NO 


WMZ*  l\*4R$i6AN  "HI   WAS 
iVQthlNv  ^DUL&  «P  SAi P 


^SAMAC+iAR ) 


%fe|M^4^l 


SEAT 


fr'rt  i  ■!  hfn  in 

■-■4?Ai»>:'.^':^"^4l-M» 

v&&  press  imt.  Mst  fCALtitftAi 

(jfR  RA^T&trM  ftJESTIOHtR  THAT  IP  RETURNED  ?<v  °OWER 
^EY-  W0»ty>^ntU>W  CONSTITUTIONAL  ■'wCtTOft  Foq  BRINGING  J 

wjuld  H&fwyt.  be^able  to  mw  the  cpNstnuiONAi 

MfftEMtNM  AjLREAt*  EFFECTED  IF  TREY  FAMED to  GET  T*»t 

(CcKriftifi#!«^Ki;te  majority^  said* 

£^Fi|liJ^:H1i-f/^¥.^■.^ti«'y^tQ^'fifr^  CPI(M),  MR  RAH  &AU 
IN .*EPtf  IP  ANOTHER  OlftSTJOH  THAT.4?  WABrPRESENt  CONFINED  Hi 
ADJUSTMENTS  TO  DEFEAT  THE.  '  C«N6RES«i   IN  KERALA    SlAU       . 
A$^£H:Si/r  'ELEtT^ ..THf.:^Mt,^;i:iCy.VAs: '^MnWEp  BY  HIS  PAR'* V 

UttKF  CXtEMib  SU>PORf  V)    A  c  *»  f  >)  government  -m m 
wfsrD£;Ht  $Ai  ft* 

jfe'Kjeo  arout rise  in  \moc:P>ic.g£:'  in  sohE  places  mr  ram  sai  fe 

Itit  WoiE  COUNTRlf   KNEW  HIS  RECORD  AS  AGRICULTURE  MlNlS'tEK. 
THEvSTATEvWAB  SUFFICIENT  STOCKS  OP  GRAINS  TO  THE  ORDER  OF  FEW 
tAKHSL  EACH. AND  IF  THERE  WAS  ANY  PRICE.  Rl$E,lT  WAS  t*'f  T^ 
FAULT*     mStRIBUTI^i^lCH  WAS  iMTiREl-V  Iwfc  RES*lNSfl»ILfTV  OF 

^ne£»wiifci<iiiiT^  a  F  sTate  ten v ernhentsvhf  a nprr>. 

feAMACHAR) 


#*w4i- 


*"k*^ 


^ 


■ , 


urgent  ;:/.•;■-, 

BOm\c>    NO   9  DELHI  ONtY  FOR  CLEARANCE  . 


.  SANJ  \V\  .TVO.'LAPT— C.UflDAPAH 

*     :      m^mW,    W    SWilVA REDDKSAJD,  J^AONTERESTfED    |N 
CONTINUING    HERSELF  InIpqwER.    SHE    fJ/O   BEEN    ?N  P0»E|  F0R7>£  ( 
PAST  aEVEW   YEARS  BUT HAD    FA l\JB{rto    SOLVE   MANY 
OF  THE  COUNTRY'S    PROBLEMS 
^EF-ERR-H^A^)  Ji£.  SUEEft8E39|~0N  or^CTrcE   n*R^r-ia)AtiliA__ 

_fiF  gtiPPFr*  mi 


2T44E— WTTEH  0  F  APPO  |N  I  ftRT.  OF 
rjVA  REDD!   SAIji    THIS   ILNUED    "^ 


THE  CHt 


WHCE,    »ft 
-TO    UNDERMINE  f  I  IE  PEOPLE /r^XT^^ 

QlE .  SAID    HE    HAL'  3E£N   EN.TRl  rTLI   V  |T)i  *&  aT<\  PARTY/ 

a.KT £)>£&>  .TG  VCF.^K  Tpr.  %^Tj£^!\  ^AT£3,\  ■  ,,,#'V  i:  -;. , 

:;:"    Trif    \Dist  ..B'FFJC.'iJC  *'&  'HE -VO'U    aE'^-k^^fe  Y Tj€ 

)£  U.)  'uf   LATE    W    'A.4&&.  T:E   RAPTY  WC!.Ll*&ERTA|NLY  "  £-" 
■  **'  .£  t-tlTr   !f';TAM|L.::.J^  '■-,     KYMATA'-    Ali.   'iVf/    Ft,! 

:'.::  a .  im} Mc;^)- ... :  ^  _       .   '■ '    _.  "■;    .> 

xn;  >  /'  f.ya-;; i  33/1     iqOIIIR g  I l-^^m^sU~^Si  *  ,: 


r? 


* 


HAY  " 

HE  ^D^TrHTf^tM£^£URj[HER 
REGAINED  IW  IMPLEMENTED,  EXPEC 
TO  NPAKTILIPATE    IN   TIIE-ElECT| 0 N S,  :W0 


<T£-  ^J^<X%t!Mfi£vMiJ? '  ST£ R ' S  ANNOUN CEf€NT  YE  STERD  AY  >//   7>^-  ^M  X/JT?^ 
/  MR  ©  R AYJSA  |D    »  X  MATUR A IL  Y  W  EL  CO  M E  ANY  /^ 

STEP  BY  (GOVERNMENT  VHfCH  LEADS  TO    RELAXATION  OFpRESENT 
EMERGENCY". 
\.  ,^£   EXPECTQS    THAT  GENERAL,   RELEASE  OF   POLITICAL   PR  I  CPNERS— 


WHETHER   HELri/lMnER44f8A  ORD< 
t&ffirr SW4A£«AR>  KDJ .  ND  P  mk     19/1 


71      Tl'ME.! 


EOU.OW- 


■f 


603 


v&&.  /m 


■  $ 

j         '  / 

J  ■' 

jjmfo*  in  charge,  tftvurort,  *u  /ndia  R«di© 
•«y»  .  / ..  it  id  (Ufli£*d     thtt  a  *torr  on  the  *.**&!  bf 
•tW^oCftl  wis  in  ftaipur      ihonld  fipi  tit  u»#d,  * 


Mae/sage  rtoeired  at  02  io  hrs. 


Halpur  ©Wise  had  •  not  filed  W  itozy  tiu  *io*f 


/ 


/ 


V 


^C4^A^-> 


AV 


tirojint    ,     / 
for  dathi  only 
tpt ho  no  ©no  {  for  dot  hi*e  approval  A  and  i..  reissue—  jive  crfc>  - 

tftack       ;  / 

raipur,  roar    19  ( samachar)  s~  the  dbi  ">ia»  mr  sudhir  tnufmerjaa 
received  inlurioa  on  his  chin  whence  and  mr  purehottar.i  lal 
teuahikj  Munata  party  candidate,  were  attacked  at  midnight 
Laot  hidht  by  swie  unknovn  persons. 

a  press  note  iaated  by  the  district  adnlnistGetiai'  wlC 

police  aotedproiptly  and  a  case  una  roistered ■  oqalnot  tho 
assailants,  investigation  was  In   >roara3e.  _ 

km  inform"'"""  ar^  bmidrn  atlng  m in i atnF4M*-*-<r"-^ 
&u    a/fiapltyoe' ageiwat  mi    mujiek  aodmuiai  »U,  fli  rai-jiir^ 

icy  Inn  a  mi  an    Tiooortln|  javrata  afliUiilnln     PQtliWffTfr* 
ta-Wli'am  tpdajr 

the  prase  note  said  that  both  fit  kaushik  *nd  mr  fiiul<herj"oe 
*ra  given  prompt,  medical  assistance* 

th*  dlstriot  aomihistretioh  haaWpealed  to  tlie  people 

to  extend  their  cooperation  in  maJnValntny  peace  end  .  oM&r 
md  help  in  conducting  peaceful  pot  A  §♦  people  nave  been 
otitioned  against  runjours  *«0  janti-ioclal  element;*. 
tfffl^amedtarld^PP-png  hem     ZiO'Jn  ra a    iy/-> 


£M"  ONLY  r^ 


*PPtt6*aU>JuJ£i  pit  iftmr  V -^ 


frtr«tf> 


\fj3ffALI0R.tFEB  ?1{    5A^ACMAR)THE  ^ANATA  PARTY  LEADER.MR  "  *3HCf,r^HTA  j 


7  -ANtKsAID  THAT  THtnE  AHOULD  BE  NO  NO  CONCENTRATION  Or  ECONOMIC  AND 
POLITICAL  POV/EftjS   IN  ONE  HAND  OR gnrttWtitoLHJ  AT  THE  CENTRE  BUT  it 
SHOULD  BE  DlStRlBUTED  TO  THE  £Mgj^T^^QRN£)p)F  THE  COUNTRY. 

.  .^R^^HTfc^S-^mS-eVE^fK^ADDRESStNfi  THE  FIRST  jPU&ilC't^ET.lNO  OF 
JANATA  PARTY  MT  GWAL I  OR./   ^Mrt**1***^  j    7K/L       /-.uUjtfCK'S'W 

•-■-"^QEysgttiEHre'faEft  lit  P  FRO^rPAT  rALA^nSgO^'TJOT'TiOnBE 


i?^<jTL: 


t .  it 


:revER. 


Ht-iemHG.AS.SHE-HAD 

tiSMHWERATURE  BUT  ADDRESSED 


fcfcft^y 


Mnx!«m*ftxw*a- 

EARI/IER     HE  ADDRESSED  PUBLIC  MEETINGS  |ff~BH  I  NO  AND  MORENA 


WRLIAMENTARY  CONSTITUENCIES*    >T  ^-«>  -        *^"'       ^^/^ 

"^Wl/MCHTA  ACCUSED   I  HE  (JUNGHtSS  f'Oft: AMENDING  THE  CQNSTiniT^^-|^: 
.ETH£iiT£_SHmA.D  REMAIN  WITH  THE     PEOPLE  AND  Tnc  KESP^NSlLlTiES  0tf\3$ 

G0VEIWteNT7wHY~TTR^  SHOULD  NOT  NOT  j£--tiADE  RESPONSIBLE 

EVER  AFTER  OF  HIS  OR  HER  OFFlcT>01^f^^e<lN  GOVERNMENT  ? 

AMENDMENT  MADE  TO  THIS  EFFECT   IN-THCOJOttim^  AND 

IT    WOULD     SU I TABlV VzzAMENDSo'  ll' 


HE  JANATA  PARTY  COME  TO 

„       'in      i       "  — ~-  ' 

/RGD      QQOCHRS       23/2 


1JL 


ED  /DELH I  PLA  CK  ACK  BPL  NO  NO     UPTO  FOUR  TKS  BPLRGO 
ANOBPL  Ut^TO    CIGHTEF.N  TKS 


Just  mrw  vwi  ^tksbpu«3d  T^^^rs;3tks 


Attn  Desk 


Any  story  from  Raipur  on  the  alleged  assault    of  some  persons 
should  be  referred  to  Mr  WL  before  use, 

GV/  19.3.77  0610 


\ 


SVi 


urgent 

for  deLhi.  onl  y 
tpL   no  no   tw 
attack   two  Last raipur 

,'rar  kaushik  toLd  newsr.an  that  some  /er sobs  attacked  them  With 
lathis  vhen  they  along  with  some  other  workers  were  on  round  of 
tie  station   area.."  /        ^  " 

he   said  tie  ms  hit   with- Lath. is •    firsts  and  kicks  and  his 
forta   was 'torn   off.  mr  rnu-kerjei  was  hit  by  3   knife  which,  caused 
juries  on- his  chin,   and  he-^was  removed  to  hospital.-  another  cpi 
Leader  mr  ram    sahay  tivarV'and  some  other  jar.at*  party,  workers  were 
sLso  injured*  he  added.    /  - 

'    villi*  mr  kaushik  descrioed  it  a  -rpotlticaL  attack-:-,   conoress 
cirrctas  said  that  it/was  a   stage  managed  shave  with  an   object  to 
"feike  political  advantage  on   election  eve. 

conoress  appealed  to   the  people  not  not  bio  be  misguided  by 
rumours   spread  by' anti-social   elements. 

heavy  police  yferrang:  em  en  ts  have  been  made  in   the  town  and       . 

police  petrolling   in  ten  si.via.d.    samachar 
corr  pr.g   kan  /2035  hrs     1S/S   .«-■-- 


PHP.  310 
2400 


PRINTED  BV  THE  MANAGER,  GOVT.  OF  INDIA  PRESS,  RING  ROAD,  NEW  DELKI-1 10064 
AUD  PUBLISHED  BY  THE   CONTROLLER  OF  PUBLICATIONS,   DEtHt-1 10054,    1978